SP18: FNDTNS/PRIN INT x D Chapter 9 Homework X CO ezto.mheducat Mary Jones Inc.

Question

SP18: FNDTNS/PRIN INT x D Chapter 9 Homework X CO ezto.mheducat Mary Jones Inc. reported $181 million of Income from Operations for its year ended December 31, 2011 This income included a gain on sale of the Mary Jones family of brand names to A.R Samuels, for total of $286 million. At the time of disposal, the brand names had a book value of zero because they been developed internally by Mary Jones Soon after the disposal, in January 2012, the company changed its name to Evergreen & Florence Companies to reflect the sale of its Mary Jones brand names For its year ended December 28, 2013, Evergreen &Florence; reported Income from Operations of $91.9 milion, after deducting the following asset impairment losses $ 3.0 million Juicy Couture brand impairment loss TRIFARI brand impairment loss Mexx impairment loss 4.4 milliorn 7.7 million Total impaiment losses $15.1 milion ecee th an on al nes reported in 2011 when it dsposed of is brand names million b. What would have been the company's Income (Loss) from Operations for this year had it not sold its Mary Jones brand names? (Enter your answer in millions.) from Operations million

Explanation / Answer

Requirement a Determination of the gain on sale that Marry Jones reported in 2011 when it disposed off its brand names Gain on sale 286 Million It will be gross proceeds less Book Value of Zero. Requirement b Income from Operations 107 Million =(91.9+15.1) This is due to reason that those brand name would not be impaired since they had Zero Book Value.

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