Reno Corporation disposed of one of its segments in the second quarter and incurred a gain from disposal of discontinued segment of $300,000,net of taxes.What is the effect of this gain from disposal of discontinued segment?
A)Increase each of the last three quarters' net income by $100,000
B)Increase net income from operations for the year by $300,000
C)Increase second quarter net income by $300,000
D)Increase each quarter's net income by $75,000

Question

Quizplus · Accepted Answer

The gain from disposal of the discontinued segment will only affect the second quarter's net income. Therefore, option C is the correct choice. The other options are incorrect as they suggest that the gain will affect net income for future quarters or the entire year.

Reno Corporation Disposed of One of Its Segments in the Second