Question
On December 31, 2014, the Board of Directors of Max Company committed to a plan to discontinue the operations of its Underwear Division. The entity
On December 31, 2014, the Board of Directors of Max Company committed to a plan to discontinue the operations of its Underwear Division. The entity estimated that Underwears 2015 operating loss would be P500,000 and that the fair value of its facilities was P300,000 less than carrying amount. Underwears 2014 operating loss was P1,400,000, and the division was actually sold for P400,000 less than carrying amount in 2015. The effective tax rate is 30%. What amount should be reported as loss from discontinued operations in 2014?
A. 0 C. 1,190,000
B. 980,000 D. 1,400,000
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