On January 1, 2014, Apricot Ltd

question 429

Multiple Choice

On January 1, 2014, Apricot Ltd.decided to discontinue its plastics making division.The division, considered a reportable segment, was sold on June 1, 2014.Division assets with a carrying value of $650,000 were sold for $500,000.Operating income from January 1, to May 31, 2014 for the division was $50,000.Ignoring taxes, what amount should be reported on Apricot's income statement for the year ended December 31, 2014, under the caption "discontinued operations"?

• A)$200,000 gain
• B)$150,000 loss
• C)$50,000 gain
• D)$100,000 loss

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Definitions:

Self-correcting Economy

An economy that possesses mechanisms to automatically adjust itself to balance out recessions or inflations without external intervention.

Recessionary Gap

The difference between the actual output of an economy and its potential output if all resources were fully employed, indicating underperformance.

Expansionary Gap

A situation in an economy where total spending exceeds the production capacity, leading to inflationary pressures and a rise in output.

Effectiveness Lag

The time needed for changes in monetary or fiscal policy to affect the economy