Wildhorse Co.'s trial balance of income statement accounts only for the year ended December 31, 2020 included the following: Debit Credit Sales revenue $287000 Cost of goods sold $173000 Administrative expenses 40300 Loss on sale of equipment 18100 Commissions to salespersons 15900 Interest revenue 9800 Freight-out 6000 Loss from discontinued operations 23900 Bad debt expense 6100 Other information: Wildhorse's income tax rate is 40%. Finished goods inventory: January 1, 2020 $158100 December 31, 2020 139000 On Wildhorse's multiple-step income statement for 2020, The discontinued operations loss is

Question

Richard

Business

19 May, 12:17

Wildhorse Co.'s trial balance of income statement accounts only for the year ended December 31, 2020 included the following: Debit Credit Sales revenue $287000 Cost of goods sold $173000 Administrative expenses 40300 Loss on sale of equipment 18100 Commissions to salespersons 15900 Interest revenue 9800 Freight-out 6000 Loss from discontinued operations 23900 Bad debt expense 6100 Other information: Wildhorse's income tax rate is 40%. Finished goods inventory: January 1, 2020 $158100 December 31, 2020 139000 On Wildhorse's multiple-step income statement for 2020, The discontinued operations loss is

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Jaron · Answer 1

The discontinued operations loss is $14,340

Explanation:

The computation of the loss of the discontinued operation is shown below:

= Loss from discontinued operations * (1 - tax rate)

= $23,900 * (1 - 40%)

= $23,900 * 0.60

= $14,340

The other items which are given in the question are not relevant. Thus, we do not consider them in the computation part. Hence, we ignored it