If Plant Assets of a Manufacturing Company Are Sold at a Gain

question 28

Multiple Choice

If plant assets of a manufacturing company are sold at a gain of $820,000 less related taxes of $250,000, and the gain is not considered unusual or infrequent, the income statement for the period would disclose these effects as

• A)a gain of $820,000 and an increase in income tax expense of $250,000.
• B)operating income net of applicable taxes, $570,000.
• C)a prior period adjustment net of applicable taxes, $570,000.
• D)an extraordinary item net of applicable taxes, $570,000.

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Definitions:

Cognitive Dissonance

The psychological discomfort experienced when holding contradictory beliefs, values, or attitudes, often leading to attitude change.

A-B Problem

This refers to a problem involving a comparison or differentiation between two distinct entities, A and B, often used in mathematical or logical contexts.

Stated Attitudes

Explicitly expressed opinions or beliefs that an individual communicates about a person, object, or concept.

Inconsistent Behaviors

Actions or reactions that do not align over time or in different situations, often leading to unpredictability.