View the step-by-step solution to: On May 1, Foxtrot Co. agreed to sell the assets of its Footwear

On May 1, Foxtrot Co. agreed to sell the assets of its Footwear Division to Albanese Inc. for $80 million. The sale was completed on December 31, 2011. The following additional facts pertain to the transaction: • The Footwear Division qualifies as a component of the entity according to GAAP regarding discontinued operations. • The book value of Footwear's assets totaled $48 million on the date of the sale. • Footwear's operating income was a pre-tax loss of $10 million in 2011. • Foxtrot's income tax rate is 40%. In the 2011 income statement for Foxtrot Co., it would report income from discontinued operations of: a. $9.2 million. b. $13.2 million. c. $22 million. d. $26 million.
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