Stellar Inc.decided on January 1 to discontinue its telescope manufacturing division.On July 1 the division's assets with a book value of $1260000 are sold for $900000.Operating income from January 1 to June 30 for the division amounted to $195000.Ignoring income taxes what total amount should be reported on Stellar's income statement for the current year under the caption Discontinued Operations?

Question

Quizplus · Accepted Answer

The loss on disposal of the division's assets is $1260000 - $900000 = $360000. The operating income from January 1 to June 30 is $195000. The total amount to be reported on Stellar's income statement for the current year under the caption Discontinued Operations is $360000 - $195000 = $165000 loss.