During the quarter, the IT department earned service revenues of $$13,000$ and had associated expenses of $$7,000.$ As the quarter ended, the IT department sold all of its assets for $$40,000.$ These assets$$ updated balance sheet values were as follows:

NBV

Inventory$-$replacement parts $$3,500$ $$3,500$

Computer A $1,000$

Accumulated Depreciation$-$ Computer A $-600400$

Computer B $900$

Accumulated Depreciation$-$ Computer B $-300600$

Diagnostic and repair tools $45,000$

Accumulated Depreciation$-$ Diagnostic and repair tools $-5,00040,000$

$44,500$

The income$/$loss from discontinued operations is:

Revenue $13,000$

Expenses $7,000$

income from discontinued ops $6,000$

The gain or loss from disposal of the equipment:

Proceeds $40,000$

Net Book Value $($NBV$)44,500$

$(4,500)$

Net income$/$loss from the discontinued IT department:

income from discontinued ops $6,000$

loss on disposal of equipment $(4,500)$

NET INCOME from discontinued op $1,500$

TAX EFFECT? IF $15\%$ rate $225$

NET INCOME from discontinued op AFTER TAX $1,275$

Answer rating: 100% (QA)

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