During July 2007 Red Company Decides to Dispose of One

question 36

Multiple Choice

During July 2007 Red Company decides to dispose of one of its subsidiaries which qualifies for accounting as a discontinued operation. At the July 2007 measurement date Red Company estimates that it will report net losses of $1,500,000 dollars from the measurement date until the disposal date which is expected to be in April 2008. In addition, Red estimates that it will lose $300,000 on the sale of the segment. How much gain or loss on discontinued operations will Red report in its 2007 income statement (net of income taxes) ?

• A) $1,500,000 loss
• B) $0
• C) $1,800,000 loss
• D) $300,000 loss

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Definitions:

Enuresis

The medical term for involuntary urination, especially by children at night, commonly known as bedwetting.

Perineal Care

The practice of maintaining cleanliness around the genital and anal areas to prevent infection and provide comfort, especially important for those with certain health conditions or limitations.

Contaminates

Substances that pollute or make something impure by physical, chemical, or biological means.

Strict Clean Technique

A set of infection control practices aiming to reduce the number of microorganisms and prevent the spread of infections in medical settings.