On May 15, Year 1, Moran Inc. approved a plan to dispose of a component of its business. It is expected that the sale will occur on February 1, Year 2, at a selling price of $ 500,000, which was the current fair value of the component. During Year 1, disposal costs incurred by Moran totaled $ 15,000. The disposal of the component represents a strategic shift in the financial results for the entity. The component had actual or estimated operating losses as follows: January 1 – May 14, Year 1 $ 130,000 May 15 – December 31, Year 1 50,000 January 1 – January 31, Year 2 15,000 The carrying amount of the component on May 15, Year 1 was $ 850,000. Before income taxes, what amount should Moran report for discontinued operations in its Year 1 Income Statement?
a. $ 545,000
b. $ 365,000
c. $ 15,000
d. $ 380,000