Liz Claiborne Inc reported 145 million of Income from

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Liz Claiborne Inc. reported $ 145 million of Income from Operations for its year ended
December 31, 2011. This income included a gain on sale of the Liz Claiborne family of brand
names to J. C. Penney, for total proceeds of $ 268 million. At the time of disposal, the brand
names had a book value of zero because they had been developed internally by Liz Claiborne
Inc. Soon after the disposal, in January 2012, the company changed its name to Fifth & Pacific
Companies to reflect the sale of its Liz Claiborne brand names. For its year ended December
28, 2013, Fifth & Pacific reported Income from Operations of $ 73.9 million, after deducting the
following asset impairment losses:Juicy Couture brand impairment loss…………. $ 1.7
millionTRIFARI brand impairment loss……………….. 3.3 millionMexx impairment loss………………………
millionTotal impairment losses……………………... $ 11.1 million(a) Determine the gain on sale that Liz
Claiborne reported in 2011 when it disposed of its brand names.(b) What would have been the
company’s Income (Loss) from Operations for this year had it not sold its Liz Claiborne brand
names?(c) Determine the Income from Operations that Fifth & Pacific would have reported in
2013 had its impairment losses been zero.(d) What percentage of operating income (before
impairment) did the 2013 impairment losses represent?View Solution:
Liz Claiborne Inc reported 145 million of Income from

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