During the current year, a company properly classified as held for sale and then disposed of a component in a strategic shift. The carrying amount of the component was $820,000 at the time of its classification as held for sale, and no loss was recognized for a write-down to fair value minus cost to sell. Its fair value minus cost to sell at all relevant times was $900,000. The assets were actually sold for $600,000. The company should recognize a loss on disposal equal to A. Extraordinary loss of $220,000. OB. $220,000. C. $300,000. D. $820,000.
During the current year, a company properly classified as held for sale and then disposed of a component in a strategic shift. The carrying amount of the component was $820,000 at the time of its classification as held for sale, and no loss was recognized for a write-down to fair value minus cost to sell. Its fair value minus cost to sell at all relevant times was $900,000. The assets were actually sold for $600,000. The company should recognize a loss on disposal equal to A. Extraordinary loss of $220,000. OB. $220,000. C. $300,000. D. $820,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:During the current year, a company properly classified as held for sale and then disposed of a component in a strategic shift.
The carrying amount of the component was $820,000 at the time of its classification as held for sale, and no loss was
recognized for a write-down to fair value minus cost to sell. Its fair value minus cost to sell at all relevant times was $900,000.
The assets were actually sold for $600,000. The company should recognize a loss on disposal equal to
A. Extraordinary loss of $220,000.
$220,000.
$300,000.
$820,000.
O B.
C.
D.
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