A company has decided to discontinue a component of its business and sells the component by the end of the year. The amount that the company would report as income from discontinued operations is (ignore tax effects) : A. income from operations for the year and either a gain or loss on the disposal of the component's assets. B. only income from operations for the year C. income from operations for the year and only a loss on the disposal of the component's assets. D. only the gain or loss on the disposal of the component's assets

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Business

Hector Franklin

15 June, 14:59

A company has decided to discontinue a component of its business and sells the component by the end of the year. The amount that the company would report as income from discontinued operations is (ignore tax effects) : A. income from operations for the year and either a gain or loss on the disposal of the component's assets. B. only income from operations for the year C. income from operations for the year and only a loss on the disposal of the component's assets. D. only the gain or loss on the disposal of the component's assets

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Cindy Poole · Answer 1

C. income from operations for the year and only a loss on the disposal of the component's assets.

Explanation:

Income from discontinued operations is a line item of a company below Income from Continuing Operations and before Net Income on an income statement. It represents the after-tax gain or loss on the sale of a component of the business. It also shows the after-tax effect of the operations of the discontinued component for the period.

The amount that the company would report as income from discontinued operations is (ignore tax effects) income from operations for the year and only a loss on the disposal of the component's assets.