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