Lupton Inc

Multiple Choice

Lupton Inc. disposes of an unprofitable segment of its business. The operation of the segment suffered a $200,000 loss in the year of disposal. The loss on disposal of the segment was $100,000. If the tax rate is 30%, and income before income taxes was $1,600,000,

A) the income tax expense on the income before discontinued operations is $390,000.
B) the income from continuing operations is $1,120,000.
C) net income is $1,300,000.
D) the losses from discontinued operations are reported net of income taxes at $300,000.