Exhibit 5-1 The following condensed income statement of Rahm Corporation is presented for the two years ended December 31, 2010 and 2009:

\begin{array}{lll}&2010&2009\\\text { Net sales } & \$ 10,000,000 & \$ 9,000,000 \\\text { Cost of sales } & \underline{6,000,000} & \underline{6,000,000} \\\text { Grossprofit } & \$ 4,000,000 & \$ 3,000,000\\\text { Operating expense } &2,500,000&2,000,000\\\text { Operating income } & \$ 1,500,000 & \$ 1,000,000 \\\text { Gain on sale of a component } & 900,000 & --\\&\$2,400.000&\$1,000.000\\\text { Income tax expense}&720,000&300,000\\\text { Net income}&\$1,680,000&\$700,000\end{array}

On January 1, 2010, Rahm entered into an agreement to sell for $2, 000, 000 one of its separate operating divisions.The sale resulted in a gain on disposition of $900, 000 on November 12, 2010, and qualifies as a discontinued component.This division's contribution to Rahm's reported income before income taxes for each year was as follows:

\begin{array}{ll}2010 & \$ 700,000 \text { loss } \\2009 & \$ 400,000 \text { loss }\end{array}

Assume an income tax rate of 30%.
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Refer to Exhibit 5-1.In the preparation of a revised comparative income statement, Rahm should report under the caption "Discontinued Operations" for 2010 and 2009, respectively,
A)income of $140, 000 and a loss of $280, 000
B)income of $140, 000 and a loss of $0
C)income of $200, 000 and a loss of $400, 000
D)a loss of $700, 000 and a loss of $400, 000

On December 31, 2010, the Net Assets of Marino Manufacturing

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