A company, Jack Holdings PLC produces two types of tiles.
In recent years, the outdoor tile business unit has failed to meet management goals. At the beginning of 2009, Jack Holdings PLC sold †ђξ outdoor tile business resulting in a $375,000 Pre Tax Gain. The indoor tile product sales where $10,500,000 at a Gross Msrgin of 30% selling expenses totalled $1,200,000 and administrative expenses totalled $1,800,000. Jack Holdings PLC is subject to a 40% income tax rate. Question 1; Prepare 2009 income statement assuming that management views the outdoor tile business as a distinct and separate line of business.Question 2; Prepare the 2009 income statement assuming that the outdoor tiles business is not a separate and distinct line of business.
A company Jack Holdings PLC produces two types of tiles outdoors and indoors.
In recent years, the outdoor tile business unit has failed to meet management goals. At the beginning of 2009, Jack Holdings PLC sold the outdoor tile business resulting in a $375,000 Pre Tax Gain. The indoor tile product sales where $10,500,000 at a Gross Msrgin of 30% selling expenses totalled $1,200,000 and administrative expenses totalled $1,800,000. Jack Holdings PLC is subject to a 40% income tax rate. Question 1; Prepare 2009 income statement assuming that management views the outdoor tile business as a distinct and separate line of business.Question 2; Prepare the 2009 income statement assuming that the outdoor tiles business is not a separate and distinct line of business.
