Jacks Corporation Decided to Sell Its Playing Card Business Segment

Multiple Choice

Jacks Corporation decided to sell its playing card business segment for $600,000, on September 1, Year 1. The disposal date is November 1, Year 1. The book value of the segment's net assets is $550,000. The pre-tax income for the segment for the period January 1 - September 1, Year 1, was a loss of $80,000; the pre-tax income for the segment for September and October was $30,000. Assuming a tax rate of 40%, choose the correct reporting for discontinued operations in the income statement of Jacks Corporation, for the year ended December 31, Year 1. $$\begin{array} { | l | l | } \hline &\text { Income (loss) from Discontinued operations } & \text { Gain (loss) from disposal of ciscontinued operations } \\\hline 1& ( \$ 50,000 ) & \$ 50,000 \\\hline 2& ( \$ 48,000 ) & \$ 48,000 \\\hline 3& ( \$ 30,000 ) & \$ 30,000 \\\hline 4& \text { There is no disc losure necessary bec ause there is no net gain or loss for Y ear } 1 \text { on discontinued operations. } \\\hline\end{array}$$

A) Choice 1
B) Choice 2
C) Choice 3
D) Choice 4