Question: Norse Manufacturing Inc prepares an annual combined statement

Norse Manufacturing, Inc., prepares an annual combined statement of income and comprehensive income. The following situations occurred during the company's 2011 fiscal year:

1. Restructuring costs were incurred due to the closing of a factory.
2. Investments were sold, and a loss was recognized.
3. Gains from foreign currency translation were recognized.
4. Interest expense was incurred.
5. A division was sold that qualifies as a separate component according to GAAP.
6. Obsolete inventory was written off.
7. The controller discovered an error in the calculation of 2010's patent amortization expense.
8. A volcano destroyed a storage facility on a South Sea island. The event is considered to be unusual and infrequent in occurrence.

1. For each situation, identify the appropriate reporting treatment from the list below (consider each event to be material).
a. As a component of operating income.
b. As a non-operating income item (other income or expense).
c. As a separately reported item.
d. As another comprehensive income item.
e. As an adjustment to retained earnings.
2. Identify the situations that would be reported net-of-tax.

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  • CreatedJune 24, 2013
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