On October 1 2017 LeBron Co agreed to sell the assets of its

On October 1, 2017 LeBron Co. agreed to sell the assets of its Heat Division to Cavalier Inc. for $80 million. The sale was completed on December 31, 2017. The following additional facts pertain to the transaction:

The Heat Division qualifies as a component of the entity according to GAAP regarding discontinued operations.

The book value of Heat\'s assets totaled $74 million on the date of the sale.

Heat\'s operating income was a pre-tax loss of $3.5 million in 2017.

LeBron\'s income tax rate is 30%.

17. In the 2017 income statement for LeBron Co., it would report income (loss) from discontinued operations of:

Solution

So, the LeBron Co. would report the gain of $ 1.75 million from discontinued operations.

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