On May 1, Foxtrot Co

question 11

Multiple Choice

On May 1, Foxtrot Co. agreed to sell the assets of its Footwear Division to Albanese Inc. for $80 million. The sale was completed on December 31, 2018. The following additional facts pertain to the transaction:
• The Footwear Division qualifies as a component of the entity according to GAAP
Regarding discontinued operations.
• The book value of Footwear's assets totaled $48 million on the date of the sale.
• Footwear's operating income was a pre-tax loss of $10 million in 2018.
• Foxtrot's income tax rate is 40%.
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In the income statement for the year ended December 31, 2018, Foxtrot Co. would report income from discontinued operations of:

• A) $9.2 million.
• B) $13.2 million.
• C) $22 million.
• D) $26 million.