Answer:
Loss on discontinued use of unit= $900,000
Explanation:
Company X sold one of its divisions for fair value of $15,000,000 while the book value is $14,000,000.
So they made a gain of $1,000,000
The division made a pretax loss of $2,500,000
Net loss= Pretax loss- Gain from sale
Net loss= 2,500,000- 1,000,000
Net loss= $1,500,000
Tax rate for Company X is 40% so taxed amount for the loss= 0.40* 1,500,000= $600,000
Loss on discontinued use of unit= Pretax loss - Tax
Loss on discontinued use of unit= 1,500,000- 600,000= $900,000
