Missoula Corporation Disposed of One of Its Segments in the Second

question 8

Multiple Choice

Missoula Corporation disposed of one of its segments in the second quarter and incurred a gain from disposal of discontinued segment of $600,000,net of taxes.What is the effect of this gain from disposal of discontinued segment?

• A)Increase net income from operations for the year by $600,000.
• B)Increase second quarter net income by $600,000.
• C)Increase each quarter's net income by $150,000.
• D)Increase each of the last three quarters' net income by $200,000.

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Definitions:

Short Run

A period in economics during which at least one factor of production is fixed, limiting the ability of the economy or firm to adjust.

Long Run

A time frame in economics where all factors of production can be varied, allowing for full adjustment to changes.

Marginal Revenue

The enhanced earnings a business receives by selling one more unit of its goods or services.

Marginal Cost

The swell in overall financial outlay resulting from the crafting of an extra unit of a good or service.