On August 31, 2016, when the carrying amount of the net assets of a business segment was P35,000,000, Eriberto Company signed a legally binding contract to sell the business segment. The sale is expected to be completed by January 31, 2017 at a sale price of P30,000,000. In addition, prior to January 31, 2017, the sale contract obliged the company to terminate the employment of certain employees of the business segment incurring an expected termination cost of P1,000,000 to be paid on June 30, 2017. The segment revenue and expenses for 2016 were P20,000,000 and P22,500,000, respectively.

1. Before income tax, what amount should be reported as loss from discontinued operation for 2016? A. 3,500,000 B. 6,000,000 C. 7,500,000 D. 8,500,000

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