On May 31, 20X1, the Arlene Corporation adopted a plan to sell its cosmetics line of business, considered a component of the entity. The assets of the component were sold on October 13, 20X1, for $1,200,000. The book value of those assets equaled $1,000,000 at the time of the sale. The component generated an operating loss of $300,000 from January 1, 20X1, through disposal. The companys tax rate is 25%. For what amount would the company report income from discontinued operations?

Multiple Choice

• Loss of $100,000.

• Loss of $75,000.

• Loss of $225,000.

• Loss of $25,000.