The Claxton Company manufactures children's toys and also has a division that makes automobile parts. Due to a change in its strategic focus, the company sold the automobile parts division. The division qualifies as a component of the entity according to GAAP. How should Claxton report the sale in its 2018 income statement?
A. Report it as restructuring costs.
B. Report it as a discontinued operation.
C. Report the income or loss from operations of the division in discontinued operations.
D. Report it as a gain on sale of investments included in income from continuing operations.
Ans: C. Report the income or loss from operations of the division in discontinued operations.
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