On June 30, Ayayai Corp. discontinued its operations in Mexico. On September 1, Ayayai disposed of the Mexico facility at a pretax loss of $600,000. The applicable tax rate is 25%. Show the discontinued operations section of Ayayai's statement of comprehensive income.

Question

Amiya

Business

4 March, 18:54

On June 30, Ayayai Corp. discontinued its operations in Mexico. On September 1, Ayayai disposed of the Mexico facility at a pretax loss of $600,000. The applicable tax rate is 25%. Show the discontinued operations section of Ayayai's statement of comprehensive income.

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Answers (1)

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Dane Powers · Answer 1

The discounted operations section will show a value of $450,000

Explanation:

In this question, we are asked to calculate the discounted operations value.

To do this, what we need to know is we are to use a mathematical approach.

The mathematical formula to to be used take into consideration the value of the net of tax = Pretax loss - (Tax rate * Pretax loss)

From the question, we can identify that the Pretax loss = $600,000

The Tax rate = 25%

The net of tax = 600,000 - (25/100 * 600,000) = 600,000 - 150,000 = $450,000