On September 1, 2012, Ramos Inc Assume a Marginal Tax Rate of 30

On September 1, 2012, Ramos Inc. approved a plan to dispose of a segment of its business. Ramos expected that the sale would occur on March 31, 2013, at an estimated gain of $350,000. The segment had actual and estimated operating profits (losses as follows):
$\begin{array}{|l|l|}\hline\text { Realized lossfrom } 1 / 1 / 12 \text { to } 8 / 31 / 12 & \$(300,000) \\\hline \text { Realized lossfrom } 9 / 1 / 12 \text { to } 12 / 31 / 12 & 200,000) \\\hline \text { Expected profit from } 1 / 1 / 13 \text { to } 3 / 31 / 13 & 400,000\\\hline\end{array}$
Assume a marginal tax rate of 30%.
Required:
In its 2012 income statement, what should Ramos report as profit or loss from discontinued operations (net of tax effects)?

Correct Answer:

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