Reference no: EM132463448

Question 1: Ralph C. specializes in Italian clothing. The ?rm has decided to dispose its subsidiary, Unbuttoned Shirt Ltd., on December 13, 2015. The carrying value of the subsidiary on the financial record is $1.1 million. However, a reliable appraisal on December 31, 2015 shows the subsidiary has only a market value of $900,000. Ralph C. subsequently sold the subsidiary on February 14, 2016 for $950,000. The operating losses of the subsidiary amounted to $130,000 for the fiscal year of 2015, and $15,000 from January 1 to February 14, 2016. Ignoring tax, the total income or loss that should be reported on the discontinued operation section of Ralph C.'s income statement for 2015 is most likely to be:

a) $130,000 loss.

b) $280,000 loss.

c) $330,000 loss.

d) $345,000 loss. 20.

Question 2: Continue with Ralph C., the total income or loss that should be reported on the discontinued operation section in the fiscal year of 2016 is most likely to be:

a) $165,000 loss.

b) $15,000 loss.

c) $ 35,000 gain.

d) $ 50,000 gain.