Byron Inc. decided on August 1, 2011, to dispose of a component of its business. The component was sold on November 30, 2011. Byron's income for 2011 included income of $250,000 from operating the discontinued segment from January 1 to the sale date. Byron incurred a loss on the November 30 sale of $220,000. Ignoring income taxes, what amount should be reported in the 2011 income statement as the net income or loss under "Discontinued Operations"?
A) $220,000 loss
B) $30,000 loss
C) $30,000 income
D) $250,000 income

Question

Quizplus · Accepted Answer

The net income or loss from discontinued operations is calculated by subtracting the loss on sale from the income from operations. Here, $250,000 (income) - $220,000 (loss) = $30,000 income.

Byron Inc Decided on August 1, 2011, to Dispose of a a Component