Answer:
Income tax expense amounts to $56,000
Explanation:
The aggregate income tax effect of the discontinued operations is as:
Net gain = Gain from the sale - Loss suffered
where
gain from sale amounts to $200,000
Loss suffered amounts to $60,000
Putting the value above:
Net gain = $200,000 - $60,000
= $140,000
On the amount of net gain, the tax will be charged, which is as:
Tax amount = Net gain × Tax rate
= $140,000 × 40%
= $56,000
Therefore, the income tax expense would be $56,000
