Describe the accounting treatment for discontinued operations. How should an analyst treat discontinued operations?© BrainMass Inc. brainmass.com October 25, 2018, 9:33 am ad1c9bdddf
Accounting - Discontinued Operations
Describe the accounting treatment for discontinued operations. How should an analyst treat discontinued operations?
According to the Generally Accepted Accounting Principles there is a special treatment to discontinued operations that is either being held for sale or was previous sold. This action has to be reported as a discontinuation of operations on a company's financial statements if the following conditions are met: resulting elimination and continuing involvement. Resulting elimination occurs when a disposal transaction yields in either an operations cash flows of a portion of the company is ...
Discontinued operations should be examined to ensure that the company is appropriately reporting their assets in annual reports based on Generally Accepted Accounting Principles. Investors should be aware of how analysts treat discontinued operations to make appropriate investment decisions.
Polytechnic Corporation - tax liability
Please see the attached file.
Polytechnic Corporation reported taxable income of $2,340,000 for the year ended December 31, 2011. The controller is unfamiliar with the required
treatment of temporary and permanent differences in reconciling taxable income to pretax financial income and has contacted your firm for advice. You
are given company records that list the following differences:
Tax depreciation in excess of book depreciation $310,000.00
Proceeds from life insurance policy upon death of officer $145,000.00
Interest revenue on municipal bonds $107,000.00
1. Compute pretax financial income.
2. Given an income tax reate of 35% prepare the journal entry or entries to record income taxes for the year.
3. Prepare a partial income statement beginning with income from continuring operations before income taxes.