On September 1,2012,Ramos Inc Assume a Marginal Tax Rate of 35%
Required:
A)In Its

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 $375,500.The segment had actual and estimated operating profits (losses as follows):
$\begin{array}{|l|r|}\hline \text { Realized loss from } 1 / 1 / 12 \text { to } 8 / 31 / 12 & \$ 200,000 \\\hline \text { Realized loss from } 9 / 1 / 12 \text { to } 12 / 31 / 12 & (135,000 \\\hline \text { Expected profit from } 1 / 1 / 13 \text { to } 3 / 31 / 13 & 475,000 \\\hline\end{array}$

Assume a marginal tax rate of 35%
Required:
A)In its 2012 income statement,what should Ramos report as profit or loss from discontinued operations (net of tax effects)?
B)Calculate the amount of income that should be shown on the 2013 income statement as a result of the operating profit and the gain on disposal (net of tax)

Correct Answer:

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A
Under U.S. GAAP, results of operations...

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