Income from

continuing
operations
700,000
Loss from
discontinued
operation -
200,000
Net income 500,000
Problem 7-12 D

Income from
continuing
operations
8,000,000
Loss from
discontinued
operation -
1,750,000
Net income 6,250,000
FV assets of
division
4,000,000
Carrying
amount of
assets
5,000,000
Impairment
loss -1,000,000
Operating loss
of division -
1,500,000
Total loss -
2,500,000
Tax effect 30%
750,000
Loss from
discontinued
operation -1,750,000
Problem 7-13 Problem 7-14
1. D 1.A 6.A
2. A 2.B 7.B
3. D 3.A 8.C
4. A 4.C
5. D 5.C