LeBron's Bookstores has two divisions: media and books.The media division had another great year with net sales of $14 million,cost of goods sold of $8 million,operating expenses of $3 million,and income tax expense of $900,000.The book division did not do as well and was sold during the year.The loss from operations and sale of the book division was $400,000 before taxes and $280,000 after taxes.Assuming the sale of the book division is reported as a discontinued operation,at what amount did LeBron's Bookstores report income before tax?
A)$1,820,000.
B)$3,000,000.
C)$2,100,000.

Question

Quizplus · Accepted Answer

The income before tax is calculated by subtracting the cost of goods sold and operating expenses from net sales for the media division, and then subtracting the loss from operations and sale of the book division before taxes. So, $14 million - $8 million - $3 million - $0.4 million = $2.6 million.

LeBron's Bookstores Has Two Divisions: Media and Books