The Claxton Company manufactures children\'s toys and also has a division that m
ID: 2773138 • Letter: T
Question
The Claxton Company manufactures children's toys and also has a division that makes automobile parts. Due to a change in its strategic focus, the company sold the automobile parts division. The division qualifies as a component of the entity according to GAAP. How should Claxton report the sale in its 2016 income statement?
a) Report it as a discontinued operation.
b) Report the income or loss from operations of the division in discontinued operations.
c) Report it as a gain on sale of investments included in income from continuing operations.
d) Report it as restructuring costs.
Explanation / Answer
B. CORRECT