[Biff-1955-Tannen]

I was under the impression that discontinued operations will have a line for operating gain/loss, and a separate line for gain/loss from disposal. Not netted together… is this not the case?

Flint Corporation has adopted FASB ASC 205-20 (Presentation of Financial Statements—Discontinued Operations). On February 2, in a strategic shift, Flint Corp.’s board of directors voted to discontinue operations of its frozen food division and to sell the division’s assets on the open market as soon as possible. The division, which qualifies as a component under FASB ASC 205-20, reported net operating losses of $20,000 in January and $30,000 in February. On February 26, sale of the division’s assets resulted in a gain of $90,000. What amount of gain from disposal of a component should Flint recognize in its income statement for the three months ended March 31?

A.

$0

B.

$40,000

C.

$60,000

Incorrect D.

$90,000

Gain from sale of assets $90,000

Less: Net operating loss 50,000

---

Gain from disposal of component to be reported $40,000

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