[hopeful_cpa]

“On January 2 2009, Winn company purchased as a long-term investment 5000 shares of P corp. commons tock for 70 a share, which is 1% interest. On Dec 31 2009, the market price of the stock was 75 per share. On Dec 18 2010, Winn needed additional cash for ops and sold all 5000 shares of P stock for 100 per share. Winn’s income tax rate was 40% for 2010. for the year ended Dec 31 2010, Winn should include in its income from continuing ops a realized gain on disposal of long-term investment of:

0

150,000

125,000

90,000

Answer:

The answer is 150,000.”

I get how they get the 150,000, but isn’t income from continuing ops NET of tax?

BEC: Done
REG: Done
AUD: Done
FAR: Done

I'M DONE!!!!!! AAAAAAAAAAAAAAAAAAAAAAHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[Anonymous]

Continuing ops is reported at GROSS, and then at NET. Basically, it's reported at both amount. First, it's at gross then they take all the continuing ops income and do it at NET amount.

Others are reported at NET amount.

Correct me if I'm wrong…so screwed for FAR🙁

[Anonymous]

CPA628 is right. All operating income is reported at its gross amount.

Income

Discountinued

Extraordinary

A-accumulated other comprehensive income

DEA – net of tax.

You report the gain on operating income. So, do not take it net of tax.

[hopeful_cpa]

I thought income from continuing ops already was net of tax?

operating income

+nonoperating income

x tax

=income from continuing ops

+discontinued (net)

+extraordinary (net)

=net income

BEC: Done
REG: Done
AUD: Done
FAR: Done

I'M DONE!!!!!! AAAAAAAAAAAAAAAAAAAAAAHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[Anonymous]

@hopeful_CPA

I amended your post to adjust the income tax component:

operating income

+nonoperating income

Income before taxes

provision for tax

=income from continuing ops

+discontinued (net)

+extraordinary (net)

=net income

[PistolPete]

A gain which is not extraordinary is not reported net of tax.

FAR - 68, 79
AUD - 82
REG - 71, 71, 80
BEC - 76

CMA
Part 1: October 2013
Part 2: January 2014

[forever4]

Tip for you to remember!

All sections report net of tax except inc from cont op = gross then tax and items unusual but not frequent NOT net of tax (after cont op and before disc op!)

FAR 5/14 88 PASSED!
REG 7/13 74 :((((((((....! I cant believe it!!!! I studied so hard...
REG retake 11/29 -> 89!!!!!!!!!!!!!!!!!!!
BEC 10/11/12 -> 84!!!!!!!!!!!!!
AUD 10/25/12 -> 95!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

I'm DONE! OMG 8 months of hard work.

I SHALL PASS. BECAUSE IT'S ME, SO EVERYTHING WILL BE OK!

[Author]

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