Munitions Inc.committed to sell its trade magazine division for $700,000 on October 1,Year 1.The book value of the division's net assets was $800,000.The disposal date is expected to be April 1,Year 2.Year 1 income of the division to October 1,Year 1 was a $30,000 loss,and income for the remainder of the year was $10,000.However,Munitions estimates that the division will lose $25,000 during the remainder of the phase-out period in Year 2.Ignoring taxes choose the correct reporting for discontinued operations in the income statement of Munitions,Inc.,for the year ended December 31,Year 1. $$\begin{array} { | l| l| l | }
\hline & \text { Income (loss) from } & \text { Gain (loss) from disposal } \
\hline & \text { Discontinued operations } & \text { of discontinued operations } \
\hline 1 & ( \$ 30,000 ) & ( \$ 115,000 ) \
\hline 2 & ( \$ 30,000 ) & ( \$ 100,000 ) \
\hline 3 & ( \$ 30,000 ) & ( \$ 90,000 ) \
\hline 4 & ( \$ 45,000 ) & ( \$ 100,000 ) \
\hline
\end{array}$$

Question

Munitions Inc.committed to sell its trade magazine division for $700,000 on October 1,Year 1.The book value of the division's net assets was $800,000.The disposal date is expected to be April 1,Year 2.Year 1 income of the division to October 1,Year 1 was a $30,000 loss,and income for the remainder of the year was $10,000.However,Munitions estimates that the division will lose $25,000 during the remainder of the phase-out period in Year 2.Ignoring taxes choose the correct reporting for discontinued operations in the income statement of Munitions,Inc.,for the year ended December 31,Year 1. $$\begin{array} { | l| l| l | } 
\hline & \text { Income (loss) from } & \text { Gain (loss) from disposal } \
\hline & \text { Discontinued operations } & \text { of discontinued operations } \
\hline 1 & ( \$ 30,000 ) & ( \$ 115,000 ) \
\hline 2 & ( \$ 30,000 ) & ( \$ 100,000 ) \
\hline 3 & ( \$ 30,000 ) & ( \$ 90,000 ) \
\hline 4 & ( \$ 45,000 ) & ( \$ 100,000 ) \
\hline
\end{array}$$

Quizplus · Accepted Answer

The Answer of Munitions Inc.committed to sell its trade magazine division for $700,000 on October 1,Year 1.The book value of the division's net assets was $800,000.The disposal date is expected to be April 1,Year 2.Year 1 income of the division to October 1,Year 1 was a $30,000 loss,and income for the remainder of the year was $10,000.However,Munitions estimates that the division will lose $25,000 during the remainder of the phase-out period in Year 2.Ignoring taxes choose the correct reporting for discontinued operations in the income statement of Munitions,Inc.,for the year ended December 31,Year 1. $$\begin{array} { | l| l| l | } 
\hline & \text { Income (loss) from } & \text { Gain (loss) from disposal } \
\hline & \text { Discontinued operations } & \text { of discontinued operations } \
\hline 1 & ( \$ 30,000 ) & ( \$ 115,000 ) \
\hline 2 & ( \$ 30,000 ) & ( \$ 100,000 ) \
\hline 3 & ( \$ 30,000 ) & ( \$ 90,000 ) \
\hline 4 & ( \$ 45,000 ) & ( \$ 100,000 ) \
\hline
\end{array}$$

Munitions Inc A)Choice 1 B)Choice 2 C)Choice 3 D)Choice 4

Munitions Inc A)Choice 1
B)Choice 2
C)Choice 3
D)Choice 4