King Corporation decided to sell its sporting goods business segment for $900,000,on September 1,Year 1,which is also the disposal date.The book value of the segment's net assets is $700,000 on this date.The pre-tax income for the segment for the period January 1 - September 1,Year 1,was $20,000.Assuming a tax rate of 40%,choose the correct reporting for discontinued operations in the income statement of King Corporation,for the year ended December 31,Year 1. $$\begin{array} { | l | l | l | }
\hline & \text { Income (loss) from } & \text { Gain (loss) from disposal } \
\hline & \text { Discontinued operations } & \text { of discontinued operations } \
\hline 1 & \$ 20,000 & \$ 200,000 \
\hline 2 & \$ 132,000 & \$ 0 \
\hline 3 & \$ 12,000 & \$ 120,000 \
\hline 4 & \$ 0 & \$ 132,000 \
\hline
\end{array}$$

Question

King Corporation decided to sell its sporting goods business segment for $900,000,on September 1,Year 1,which is also the disposal date.The book value of the segment's net assets is $700,000 on this date.The pre-tax income for the segment for the period January 1 - September 1,Year 1,was $20,000.Assuming a tax rate of 40%,choose the correct reporting for discontinued operations in the income statement of King Corporation,for the year ended December 31,Year 1. $$\begin{array} { | l | l | l | } 
\hline & \text { Income (loss) from } & \text { Gain (loss) from disposal } \
\hline & \text { Discontinued operations } & \text { of discontinued operations } \
\hline 1 & \$ 20,000 & \$ 200,000 \
\hline 2 & \$ 132,000 & \$ 0 \
\hline 3 & \$ 12,000 & \$ 120,000 \
\hline 4 & \$ 0 & \$ 132,000 \
\hline
\end{array}$$

Quizplus · Accepted Answer

The Answer of King Corporation decided to sell its sporting goods business segment for $900,000,on September 1,Year 1,which is also the disposal date.The book value of the segment's net assets is $700,000 on this date.The pre-tax income for the segment for the period January 1 - September 1,Year 1,was $20,000.Assuming a tax rate of 40%,choose the correct reporting for discontinued operations in the income statement of King Corporation,for the year ended December 31,Year 1. $$\begin{array} { | l | l | l | } 
\hline & \text { Income (loss) from } & \text { Gain (loss) from disposal } \
\hline & \text { Discontinued operations } & \text { of discontinued operations } \
\hline 1 & \$ 20,000 & \$ 200,000 \
\hline 2 & \$ 132,000 & \$ 0 \
\hline 3 & \$ 12,000 & \$ 120,000 \
\hline 4 & \$ 0 & \$ 132,000 \
\hline
\end{array}$$

King Corporation Decided to Sell Its Sporting Goods Business Segment