Answer:
(C) $1,000,000
Step-by-step explanation:
A company's continuing operations are events that make up or are involves in the regular business activity of a company. As such, for a company whose primary business is the sales of, for example, groceries, the sale of an equipment is not a part of the Company's continuing operations.
For Bridge Company, its income from continuing operations before income tax is computed as follows.
Sales revenue, $5,000,000
Less, Cost of goods sold, $3,000,000
Less Administrative expenses, $1,000,000
Therefore, income from continuing operations = $1,000,000.
Gain on sale of equipment, loss on discontinued operations, and an adjustment for previous depreciation expenses are not continuing operations' items.