Use the Following to Answer Questions

question 22

Multiple Choice

Use the following to answer questions
Kaiser Corporation sold its Telecommunications Division during 2010. The company's accountants determined that the division earned $850,000 of pre-tax income during 2008 prior to disposal. The sale resulted in a $370,000 loss before taxes. Kaiser's income from continuing operations for 2008 amounted to $4,138,000. The company's effective tax rate is 35%.
-The amount of gain (loss) from disposal of the Telecommunications Division that would appear on the 2010 income statement of Kaiser Corporation is:

• A)$129,500 loss
• B)$240,500 loss
• C)$370,000 loss
• D)$312,000 gain

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Definitions:

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An accounting method that assigns costs to products or services based on the activities and resources used to produce them.

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