Kandon Enterprises, Inc., has two operating divisions; one manufactures machinery and the other breeds and sells…

Kandon Enterprises, Inc., has two operating divisions; one
manufactures machinery and the other breeds and sells horses. Both
divisions are considered separate components as defined by
generally accepted accounting principles. The horse division has
been unprofitable, and, on November 15, 2021, Kandon adopted a
formal plan to sell the division. The sale was completed on April
30, 2022. At December 31, 2021, the component was considered held
for sale. On December 31, 2021, the company’s fiscal year-end, the
book value of the assets of the horse division was $394,000. On
that date, the fair value of the assets, less costs to sell, was
$340,000. The before-tax loss from operations of the division for
the year was $280,000. The company’s effective tax rate is 25%. The
after-tax income from continuing operations for 2021 was
$540,000.
Required: Prepare a partial income statement for 2021 beginning
with income from continuing operations. Ignore EPS disclosures.
Prepare a partial income statement for 2021 beginning with
income from continuing operations. Assume that the estimated net
fair value of the horse division’s assets was $680,000, instead of
$340,000. Ignore EPS disclosures.