When a component of a company's operations is classified as held for sale at the end of an accounting period, The component may not be reported as a discontinued operation until sold. The component will be reported on the balance sheet at the higher of its (1) fair value net of any costs to sell or (2) book value. The company may report the difference between the component's (1) fair value net of any costs to sell and (2) book value as a loss from discontinued operations on the income statement. None of these choices apply.

19)-When a company sells used equipment for a loss, the net profit margin percentage is unaffected. A) true B)false

Requirement Complete the following table by indicating: 1. The section of the income statement where the item should be included (e.g., operating, non-operating, discontinued operations), and 2. Whether the event is reported net of tax. The first event is completed as a guide. Event Loss on disposal of equipment Gain on sale of plant assets Impairment loss Loss on inventory write-off after government prohibition Operating income Unrealized loss on available-for-sale investments Gain on disposal of expropriated land Unrealized gain on trading securities Operating income of discontinued division Loss on inventory write-off due to obsolescence Income Statement Classification Non-operating Reported Net of Tax? No

Assume an income statement with the following classifications: RevenuesCost of goods soldDistribution expensesGeneral & administrative expensesOther revenues and expensesIncome tax on income from continuing operationsGain from disposal of discontinued operationsIncome tax on gain from discontinued operationsNone of the above Indicate by letter how each of the following should be classified: Advertising expenseAmortization of a patent held as an investmentCash dividend received on short-term investmentDepreciation on plant that manufactures good for sale (prior to sale of the goods)Freight on salesIncome tax effect of loss on sale of plantIncome tax on gain on sale of short-term investment in securitiesInterest expenseInterest revenueLoss on sale of patentDividend revenue from investmentSalary of company presidentSalesSales returnsServices sold