The following condensed income statements of the Jackson Holding Company are presented for the two y 1 answer below »
The following condensed income statements of the Jackson Holding Company are presented for the two years ended December 31, 2013 and 2012: 2013 2012 Sales $ 16,300,000 $ 10,900,000 Cost of goods sold 9,850,000 6,650,000 Gross profit 6,450,000 4,250,000 Operating expenses 3,720,000 3,120,000 Operating income 2,730,000 1,130,000 Gain on sale of division 730,000 Ac€?? 3,460,000 1,130,000 Income tax expense 1,038,000 339,000 Net income $ 2,422,000 $ 791,000
On October 15, 2013, Jackson entered into a tentative agreement to sell the assets of one of its divisions. The division qualifies as a component of an entity as defined by GAAP. The division was sold on December 31, 2013, for $5,390,000. Book value of the divisionAc€?cs assets was $4,660,000. The divisionAc€?cs contribution to JacksonAc€?cs operating income before-tax for each year was as follows: 2013 $465,000 loss 2012 $365,000 loss Assume an income tax rate of 30%. Required:
1.
Prepare revised income statements according to generally accepted accounting principles, beginning with income from continuing operations before income taxes. Ignore EPS disclosures. (Amounts to be deducted should be indicated with a minus sign.)
