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When a company disposes of a discontinued operation (segment), the transaction should be included in the income statement as a gain or loss on disposal, and reported as A)an amount after continuing operations

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When a company disposes of a discontinued operation (segment), the transaction should be included in the income statement as a gain or loss on disposal, and reported as

A)an amount after continuing operations.

B)a bulk sale of plant assets included in income from continuing operations.

C)other comprehensive income.

D)a prior period adjustment.

QUESTION ONE

Sally Ltd purchased a machine for wool manufacturing on 30 June 2010 for $1,850,000. Additionally, Sally incurred the following expenses:

$ 50,000 for assembling and testing the machine;

$ 60,000 for estimated dismantling costs;

$ 10,000 for first year maintenance;

$ 40,000 for site preparation costs.

REQUIRED:

1. Determine the cost of acquisition of the machine.