In February 2019, Wall Corp decided to sell its entire Plant division

Accounting Feb 15, 2021

In February 2019, Wall Corp decided to sell its entire Plant division. The Plant division was a major part of Wall Corp's business and the sale will result in a strategic change in direction for the company. The sale was completed in January 2020 and resulted in a gain on disposal of P500,000. In 2019 Plant's net losses were P350,000 and P20,000 in 2020 up until the date of sale. Excluding taxation, what should the net gain/(loss) to be reported in the income statements of Wall Corp for its Plant division?

Expert Solution

Computation of Net Gain/(loss) to be reported in the income statements of Wall Corp for its Plant division:

For 2019: A loss of P350,000 should be reported in the income statements of Wall Corp for its Plant division.

For 2020: A gain of P500,000-P20,000 = P480,000 should be reported in the income statements of Wall Corp for its Plant division.

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