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During 2020, Blossom Company disposed of Cynthia Division, a major component of its business
During 2020, Blossom Company disposed of Cynthia Division, a major component of its business. Blossom realized a gain of $2940000, net of taxes, on the sale of Cynthia's assets. Cynthia's operating losses, net of taxes, were $3410000 in 2020. How should these facts be reported in Blossom's income statement for 2020?
Total Amount to be Included in
Income from Results of
Continuing Operations Discontinued Operations
$3410000 loss
$2940000 gain
470000 loss
0
0 470000 loss
2940000 gain
3410000 loss
Expert Solution
Income from Continuing Operations:
There is no income from continuing operation thus it equals $0
Results of Discontinued Operations: Operating losses - Gain realized
= $3410000 - $2940000
= $470000 (loss)
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