On December 31, 2016, the end of the fiscal year, California Microtech Corporation completed the sale of its semiconductor business for $17 million. The business segment qualifies as a component of the entity according to GAAP. The book value of the assets of the segment was $16 million. The loss from operations of the segment during 2016 was $4.6 million. Pretax income from continuing operations for the year totaled $6.7 million. The income tax rate is 30%.
Prepare the lower portion of the 2016 income statement beginning with pretax income from continuing operations. Ignore EPS disclosures.
|Income tax expense = $6,700,000 × 30% = $2,010,000|
|Loss from operations of discontinued component:|
|Gain on sale of assets||$||1,000,000||($17 million less $16 million)|
|Loss from operations||(4,600,000||)|
| || || |
|Total before-tax loss||$||(3,600,000||)|