On November 15, 2012 Jones Co. sold a segment of its business for $2,700,000. The net
book value of the segment at the time of its disposal was $2,900,000. Jones had pretax
operating income of $3,600,000 for 2012 which included $720,000 in losses from the
discontinued segment prior to its disposal. Assume Jones’ tax rate is 30%.
Prepare a partial income statement for Jones Co, beginning with income from continuing
operations before taxes.
Cash flow from salesBook valueProfit/LossTax gain 27000002900000-20000060000 Pretax operating incomeTaxIncome after taxCash flow from saleNet income 36000001080000252000027600005280000