Which the income statement should report the profit

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Problem 1: When the disposal of a significant business component occurs, the income statement should report the profit (or loss) from this event as:

a. Other revenue or expense

b. Cost of goods sold

c. Discontinued operations before tax

d. discontinued operations net of tax

Problem 2:  GNB global inc. has sold its distribution division in the current year. GNB has a $120,000 loss from operation of the distribution division and a gain on sale of the division's assets of $40,000. Assuming GNB has a tax rate of 30% the results from discontinued operations reported on GNB's income statement is:

a. Loss of $44,000

b. Loss of 56,000

c. Loss of $80,000

d. Loss of $84,000

Reference no: EM132906629

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