Choice "B" is correct. The operating losses to be included in Smith's Year 1 income statement would be the total Year 1 operating losses, regardless of whether those losses occurred before or after the date the decision to dispose of the component was made, and not any Year 2 operating losses. Projected operating losses are not anticipated and accrued.
Choice "c" is incorrect. The operating losses to be included in Smith's Year 1 income statement would be the total Year 1 operating losses, regardless of whether those losses occurred before or after the date the decision to dispose of the component was made, and not any Year 2 operating losses.
Choice "a" is incorrect. The operating losses to be included in Smith's Year 1 income statement would be the total Year 1 operating losses, regardless of whether those losses occurred before or after the date the decision to dispose of the component was made, and not any Year 2 operating losses.
Choice "d" is incorrect. The operating losses to be included in Smith's Year 1 income statement would be the total Year 1 operating losses, regardless of whether those losses occurred before or after the date the decision to dispose of the component was made, and not any Year 2 operating losses.