Sierra Inc A)Choice 1
B)Choice 2
C)Choice 3
D)Choice 4

question 49

Multiple Choice

Sierra Inc.committed to sell its mountaineering division for $700,000 on October 1,Year 1.The book value of the division's net assets was $800,000.The disposal date is expected to be April 1,Year 2.Year 1 income of the division to October 1,Year 1 was a $30,000 loss,and income for the remainder of the year was a $10,000 loss.Sierra estimates that the division will lose another $25,000 during the remainder of the phase-out period in Year 2.Ignoring taxes choose the correct reporting for discontinued operations in the income statement of Sierra,Inc.,for the year ended December 31,Year 1. $$\begin{array} { | l | l | l | } \hline & \text { Income (loss) from } & \text { Gain (loss) from disposal } \\\hline & \text { Discontinued operations } & \text { of discontinued operations } \\\hline 1 & \$ 0 & ( \$ 165,000 ) \\\hline 2 & ( \$ 165,000 ) & \$ 0 \\\hline 3 & ( \$ 30,000 ) & ( \$ 135,000 ) \\\hline 4 & ( \$ 65,000 ) & ( \$ 100,000 ) \\\hline\end{array}$$

• A)Choice 1
• B)Choice 2
• C)Choice 3
• D)Choice 4

---

Definitions:

Elastic Demand

A market condition where the quantity demanded of a good or service significantly changes in response to a change in price.

Inelastic Demand

A situation where the demand for a product does not significantly change with a change in price.

No-Name Brand

Products that are sold without a brand name, often packaged plainly and priced lower than branded counterparts, focusing on basic functionality.

Professional Chefs

Skilled individuals who are trained in the art of food preparation, cooking, and presentation in a professional setting.