The unaudited income statements of Disposo Corporation are reproduced below.

On August 15, Year 8, the company decided to discontinue its Metals Division. The business was sold on December 31, Year 8, at book value except for a factory building with a book value of $25 that was sold for $15. Operations of the Metals Division were:

Required:
Correct the Year 7 and Year 8 income statements to reflect the proper reporting of discontinued operations.

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Year 8 Year 7 - $1,100 $900 Sales. Costs and expenses . 990 860 .... Loss on asset disposal.. 10 Income before taxes. 100 40 ........ Тах ехрense... 50 20 $ 20 .$50 Net income. | S*|| Sales Income (Loss) Year 7 . $300 $8 (3) (1) Aug. 16 to Dec. 31, Year 8. 75