Sierra Inc. committed to sell its mountaineering 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 a $10,000 loss. Sierra estimates that the division will lose another $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 Sierra, Inc., for the year ended December 31, Year 1. $$\begin{array} { | l | l | }
\hline &\text { Income (loss) from Discontinued operations } & \text { Gain (loss) from disposal of discontinued operations } \
\hline 1& \$ 0 & ( \$ 165,000 ) \
\hline 2& ( \$ 165,000 ) & \$ 0 \
\hline 3& ( \$ 30,000 ) & \$ \$ 135,000 ) \
\hline 4 &( \$ 65,000 ) & \$ \$ 100,000 ) \
\hline
\end{array}$$

Question

Sierra Inc. committed to sell its mountaineering 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 a $10,000 loss. Sierra estimates that the division will lose another $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 Sierra, Inc., for the year ended December 31, Year 1. $$\begin{array} { | l | l | } 
\hline &\text { Income (loss) from Discontinued operations } & \text { Gain (loss) from disposal of discontinued operations } \
\hline 1& \$ 0 & ( \$ 165,000 ) \
\hline 2& ( \$ 165,000 ) & \$ 0 \
\hline 3& ( \$ 30,000 ) & \$ \$ 135,000 ) \
\hline 4 &( \$ 65,000 ) & \$ \$ 100,000 ) \
\hline
\end{array}$$

Quizplus · Accepted Answer

The Answer of Sierra Inc. committed to sell its mountaineering 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 a $10,000 loss. Sierra estimates that the division will lose another $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 Sierra, Inc., for the year ended December 31, Year 1. $$\begin{array} { | l | l | } 
\hline &\text { Income (loss) from Discontinued operations } & \text { Gain (loss) from disposal of discontinued operations } \
\hline 1& \$ 0 & ( \$ 165,000 ) \
\hline 2& ( \$ 165,000 ) & \$ 0 \
\hline 3& ( \$ 30,000 ) & \$ \$ 135,000 ) \
\hline 4 &( \$ 65,000 ) & \$ \$ 100,000 ) \
\hline
\end{array}$$

Sierra Inc A) Choice 1 B) Choice 2 C) Choice 3 D)

Sierra Inc A) Choice 1
B) Choice 2
C) Choice 3
D)