Exhibit 5-1
The following condensed income statement of Ranger Corporation is presented for the two years ended December 31, 2016 and 2015: On January 1, 2016, Ranger entered into an agreement to sell one of its separate operating divisions for $2,000,000. The sale resulted in a gain on disposition of $900,000 on November 12, 2016, and qualifies as a discontinued component. This division's contribution to Ranger's reported income before income taxes for each year was as follows:
2016 $\quad $ $\quad $$700,000 loss
2015 $\quad $ $\quad $$400,000 loss
Assume an income tax rate of 30%.
-Refer to Exhibit 5-1. In the preparation of a revised comparative income statement, Ranger should report under the caption "Discontinued Operations" for 2016 and 2015, respectively,
A) income of $140,000 and a loss of $280,000.
B) income of $140,000 and a loss of $0.
C) income of $200,000 and a loss of $400,000.
D) a loss of $700,000 and a loss of $400,000.

Question

Exhibit 5-1
The following condensed income statement of Ranger Corporation is presented for the two years ended December 31, 2016 and 2015:   On January 1, 2016, Ranger entered into an agreement to sell one of its separate operating divisions for $2,000,000. The sale resulted in a gain on disposition of $900,000 on November 12, 2016, and qualifies as a discontinued component. This division's contribution to Ranger's reported income before income taxes for each year was as follows:
  2016  $\quad $ $\quad $$700,000 loss
2015  $\quad $ $\quad $$400,000 loss
 Assume an income tax rate of 30%.
-Refer to Exhibit 5-1. In the preparation of a revised comparative income statement, Ranger should report under the caption "Discontinued Operations" for 2016 and 2015, respectively,
A) income of $140,000 and a loss of $280,000. 
B) income of $140,000 and a loss of $0. 
C) income of $200,000 and a loss of $400,000. 
D) a loss of $700,000 and a loss of $400,000.

Quizplus · Accepted Answer

Discontinued operations should reflect the results of operations that have been disposed of or are classified as held for sale. The income of $140,000 for 2016 and a loss of $280,000 for 2015 would be reported under this caption, as they represent the net results of the discontinued segment for those years.

Exhibit 5-1 the Following Condensed Income Statement of Ranger Corporation \quad

Exhibit 5-1
the Following Condensed Income Statement of Ranger Corporation $\quad$