Question

Dandy Candy Company sold its licorice division resulting in a loss of $60,000. Assuming a tax rate of 25%, the loss on this disposal will be reported on the income statement at what amount? Question 10 options: $75,000 $15,000 $60,000 $45,000

Answer 1

Answer: Option (d) is correct.

Step-by-step explanation:

Given that,

Company sold its licorice division resulting in a loss = $60,000

Tax rate = 25%

Loss on this disposal will be reported = $60,000 × (1 - 0.25)

= $45,000

Therefore, the loss on this disposal will be reported on the income statement is $45,000.