Question

On November 1, Year 2, Smith Co. contracted to dispose of an industry segment on February 28, Year 3. Throughout Year 2, the segment had operating losses. These losses were expected to continue until the segment's disposition. Which of the following losses should be included in discontinued operations reported in Smith's Year 2 income statement?
I. Operating losses for the period January 1 to October 31, Year 1.
II. Operating losses for the period November 1 to December 31, Year 1.
III. Estimated operating losses for the period January 1 to February 28, Year 2.


a. II and III only.
b. I and II only.
c. II only.
d. I and III only.

Answer 1

Answer:

Choice "B" is correct. The operating losses to be included in Smith's Year 1

Explanation: