During 2020, Lopez Corporation disposed of Pine Division, a major component of its business. Lopez realized a gain of $3,000,000, net of taxes, on the sale of Pine's assets. Pine's operating losses, net of taxes, were $3,500,000 in 2020. How should these facts be reported in Lopez's income statement for 2020

The income statement of Lopez corporation  was reported to have a loss of $500,000 and is further explained below.

Explanation:

Solution

Given that:

Lopez corporation realized a gain of = $3,000,000

Pine's net taxes, operating losses in 2020 was = $3,500,000

Now,

The way it will be reported in Lopez income statement for 2020 is shown below:

                 The Lopez's Income statement for 2020

                                      Total Amount to be included in

Income from Continuing Operations     Results of Discontinued Operations                                                                    

               0                                                                    $500,000 loss

Note: We subtract the operating loss and net taxes of Pine Division from Lopez cooperation gain, which is stated as follows

$3,500,000 - $3,000,000 = $500,000

both are integral parts of a corporate balance sheet. the cash flow statement, or statement of cash flows, measures the sources of a company's cash and its uses of cash over a specific time period. the income statement measures a company's financial performance, such as revenues, expenses, profits or losses over a specific time period (in fact, it's sometimes called a statement of financial performance).

a cash flow statement shows exactly how much money a company has received and how much it has spent, traditionally over a period of one month. it captures the current operating results and changes on the balance sheet, such as increases or decreases in accounts receivable or accounts payable, and does not include noncash accounting items such as depreciation and amortization. the cash flow generally comes from revenue received as a result of business activity, but it may be augmented by funds available as a result of credit. a cash flow statement is used to determine the short-term viability and liquidity of a company, specifically how well it is positioned to pay its bills and vendors.

previous business sales - c.