Family Fashions Corporation Discontinued Kid-Choice,its Entire Line of Children's Clothing,in

question 33

Multiple Choice

Family Fashions Corporation discontinued Kid-Choice,its entire line of children's clothing,in November of 2015.Prior to the disposal,Kid-Choice generated a loss of $600,000 (net of tax) for the period from January through the sale date.Because of the value of the real estate and machinery,there was a gain of $850,000 (net of tax) on the actual sale.How should this situation be reported in the financial statements of Family Fashions for 2015?

• A)A $250,000 gain should be included in the 2015 income statement as an extraordinary item.
• B)A $600,000 loss should be included in income from operations and a $850,000 gain should be reported in the "discontinued operations" section of the income statement.
• C)A $250,000 adjustment to beginning retained earnings should be in the statement of retained earnings.
• D)A $250,000 gain should be in the "discontinued operations" section of the income statement.

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Definitions:

Milligrams of Residue

A measurement indicating the amount of substance remaining after a process or reaction, typically expressed in milligrams.

Confidence Interval

A range of values, derived from sample data, that is likely to contain the value of an unknown population parameter, with a certain degree of confidence.

Population Mean

The average of a set of values for the entire population.

Significance Level

In statistical hypothesis testing, it is the probability of rejecting the null hypothesis when it is true, often denoted by alpha (α).