If Capital Assets of a Manufacturing Company Are Sold at a Gain

Multiple Choice

If capital assets of a manufacturing company are sold at a gain of $820,000 less related taxes of $250,000, and the gain is not considered unusual or infrequent, the income statement for the period would disclose the effect if this sale as:

A) a gain of $820,000 and an increase in income tax expense of $250,000.
B) operating income net of applicable taxes, $570,000.
C) a retroactive correction of prior years' error, net of applicable taxes, $570,000.
D) an unusual item net of applicable taxes, $570,000.