On May 1, Foxtrot Co

question 99

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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Suppose that the Footwear Division's assets had not been sold by December 31, 2018, but were considered held for sale. Assume that the fair value of these assets was $80 million at December 31, 2018. In the income statement for the year ended December 31, 2018, Foxtrot Co., would report discontinued operations of a:

• A) $6 million loss.
• B) $10 million loss.
• C) $13.2 million income.
• D) None of these answer choices are correct.

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Fused Sentence

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Run-on Sentence

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The grammatical error of joining two independent clauses with a comma without an appropriate conjunction or punctuation mark.

Comma Splice

A grammatical mistake where two independent clauses are joined incorrectly with only a comma without an appropriate conjunction.