On May 1, Foxtrot Co. agreed to sell the assets of its Footwear Division to Albanese Inc. for $80 million. The sale was completed on December 31, 2021. The following additional facts pertain to the transaction: The Footwear Division qualifies as a component of the entity according to GAAP regarding discontinued operations. The book value of Footwear's assets totaled $48 million on the date of the sale. Footwear's operating income was a pre-tax loss of $10 million in 2021. Foxtrot's income tax rate is 25%. In the income statement for the year ended December 31, 2021, Foxtrot Co. would report:

Foxtrot Co.

In the income statement for the year ended December 31, 2021, Foxtrot Co. would report:

the disposal (profit from disposal of division totaling $32 million) after operating pre-tax loss of $10 million and this will turn the operating pre-tax loss to a net pre-tax income of $22 million.

Explanation:

Proceeds from sale of assets of the Footwear Division = $80 million

Book value of Footwear's assets = $48 million

Gain from disposal = $32 million

Income Statement for the year ended December 31, 2021:

Footwear Division:

Operating Income (Loss)           ($10,000,000)

Gain from disposal of division     32,000,000

Pre-tax income                           $22,000,000

Income tax (25%)                            5,500,000

After-tax income                         $16,500,000

explanation: doctrine of respondeat superior is a legal doctrine that is commonly used in tort. this principle makes an employer or principal legally responsible for the wrongful acts done by an employee or agent, if such acts occur within the scope of the employment or agency.