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Jasmine Inc has a cell phone retail establishment in its portfolio of companies. The Cell phone establishment generates operating income of $6,000 per month. On

Jasmine Inc has a cell phone retail establishment in its portfolio of companies. The Cell phone establishment generates operating income of $6,000 per month. On October 1, Year Four, the establishment is sold at a loss of $96,000. The effective tax rate is 30 percent. Jasmine is now preparing comparative statements for Year Three and Four. Which of the following statements is true

  • A.

    If this is viewed as a discontinued operation, the income from discontinued operation at the bottom of the Year Four income statement would show $(42,000).

  • B.

    If this is viewed as a discontinued operation, the income statement for Year five will be reconfigured but net income is not changed

  • C.

    If this is viewed as a discontinued operation, the $(96,000) will be reported by the company within its other gains and losses on the income statement

  • D.

    If this is viewed as a discontinued operation, the income/loss from discontinued operation at the bottom of the Year Four income statement would show $(29,400).

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