dandy candy company sold its licorice division resulting in a loss of $80,000. assuming a tax rate of 25%…

dandy candy company sold its licorice division resulting in a loss of $80,000. assuming a tax rate of 25%, what amount will be reported for the loss on disposal in the companys income statement?\no $20,000\no $60,000\no $100,000\no $80,000

dandy candy company sold its licorice division resulting in a loss of $80,000. assuming a tax rate of 25%, what amount will be reported for the loss on disposal in the companys income statement?\no $20,000\no $60,000\no $100,000\no $80,000

Answer

Explanation:

Step1: Calculate the after - tax loss

The loss is $80,000. Since the tax rate is 25%, the tax - shield on the loss is $80,000\times25% = 20,000$. The after - tax loss is $80,000\times(1 - 25%)=80,000\times0.75 = 60,000$.

Answer:

$60,000