The semiconductor business of the California Microtech Corporation qualifies as

Question

The semiconductor business of the California Microtech Corporation qualifies as a component of the entity according to GAAP. The book value of the assets of the segment was $8 million. The loss from operations of the segment during 2018 was $3.6 million. Pretax income from continuing operations for the year totaled $5.8 million. The income tax rate is 30%. Assume that the semiconductor segment was not sold during 2018 but was held for sale at year-end. The estimated fair value of the segment's assets, less costs to sell, on December 31 was $10 million. Prepare the lower portion of the 2018 income statement beginning with pretax income from continuing operations. Ignore EPS disclosures. (Amounts to be deducted and negative amounts should be indicated with a minus sign. Enter your answers in whole dollars.) CALIFORNIA MICROTECH CORPORATION Partial Income Statement For the Year Ended December 31, 2018 Income from continuing operations before income taxes Discontinued operations:

Explanation / Answer

California Microtech Corporation

Partial Income Statement

For the year ended December 31, 2018

$ million

Income from continuing operations before income taxes

5.8

Tax expense ($5.8 x 30%)

-1.74

Profit from continuing operations

4.06

Discontinued operations

Loss from discontinued operations

-3.6

Profit for the period

0.46

California Microtech Corporation

Partial Income Statement

For the year ended December 31, 2018

$ million

Income from continuing operations before income taxes

5.8

Tax expense ($5.8 x 30%)

-1.74

Profit from continuing operations

4.06

Discontinued operations

Loss from discontinued operations

-3.6

Profit for the period

0.46

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