A company uses the calendar year as its financial results reporting time period. On May 31 of the prior year, the company committed to a plan to sell a line of business. The sale represents a strategic shift that will have a major effect on the company's operations and financial results. For the period January 1 through May 31 of the prior year, the line of business had revenues of $1,000,000 and expenses of $1,600,000. The assets of the line of business were sold on November 30, at a los for which no tax benefit is available. In its income statement for the year ended December 31 of the prior year, how should the company report the line of business operations from January 1 through May 31? A. $600,000 should be reported as an unusual or infrequent loss. B. $1,000,000 and $1,600,000 should be included with revenues and expenses, respectively, as part continuing operations. C. $600,000 should be reported as part of the loss on disposal of a component. D. $600,000 should be included in the determination of income or loss from operations of a discontinued component.correct

A company uses the calendar year as its financial results reporting time period. On May 31 of the prior year, the company committed to a plan to sell a line of business. The sale represents a strategic shift that will have a major effect on the company's operations and financial results. For the period January 1 through May 31 of the prior year, the line of business had revenues of $1,000,000 and expenses of $1,600,000. The assets of the line of business were sold on November 30, at a los for which no tax benefit is available. In its income statement for the year ended December 31 of the prior year, how should the company report the line of business operations from January 1 through May 31? A. $600,000 should be reported as an unusual or infrequent loss. B. $1,000,000 and $1,600,000 should be included with revenues and expenses, respectively, as part continuing operations. C. $600,000 should be reported as part of the loss on disposal of a component. D. $600,000 should be included in the determination of income or loss from operations of a discontinued component.correct

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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