CFA Practice Question

There are 534 practice questions for this study session.

CFA Practice Question

A company with a tax rate of 40% sold a capital asset with a net book value of $500,000 for $570,000 during the year. Which of the following amounts (in $) will most likely be reported on its income statement for the year related to the asset sale?
A. $42,000
B. $70,000
C. $570,000
Explanation: The disposition of a capital asset is reported as a net gain or loss ($570,000 - $500,000 = $70,000) on the income statement before tax effects.

User Contributed Comments 2

User Comment
Inaganti6 Great question. I guess it appears in non-recurring ?
dbalakos I would say discontinued although not certain, can someone confirm this?
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