Flashcards: Income Statement

The metal division of a company generates an operating profit of $10,000 per month. On the final day of year 1, the company officials decide to sell the division which has a book value of $540,000. These officials believe they can sell the division for $570,000 but only after spending $70,000 needed to make the sale. The metal division meets the qualifications to be classified as an asset held for sale. In addition, the division qualifies as a discontinued operation. It is sold for the anticipated amount in February of year 2. Ignoring income taxes, what does the company report at the bottom of its year 1 income statement for the discontinued operation?

$50,000 profit

$0

$120,000 profit

$80,000 profit

All CPA Financial Accounting and Reporting (FAR) Resources

92 Practice Tests Question of the Day Flashcards Learn by Concept
Want to review CPA Financial Accounting and Reporting (FAR) but don’t feel like sitting for a whole test at the moment? Varsity Tutors has you covered with thousands of different CPA Financial Accounting and Reporting (FAR) flashcards! Our CPA Financial Accounting and Reporting (FAR) flashcards allow you to practice with as few or as many questions as you like. Get some studying in now with our numerous CPA Financial Accounting and Reporting (FAR) flashcards.
Learning Tools by Varsity Tutors