The following financial statement was prepared by employees of Klein Corporation:
* 1: New styles and rapidly changing consumer preferences resulted in a $37,000 loss on the disposal of discontinued styles and related accessories.
* 2: The corporation sold an investment in trading securities at a loss of $39,050. The corporation normally sells securities of t his type.
* 3: The corporation sold one of its warehouses at an $86,350 loss (net of taxes).
* 4: The corporation was charged $34,500 for additional income taxes resulting from a settlement in 2014. Of this amount, $17,000 was for 2013, and the balance was for 2012.
This type of litigation recurs frequently at Klein Corporation.
Identify and discuss the weaknesses in classification and disclosure in the single-step income statement above. You should explain why these treatments are weaknesses and what the proper presentation of the items would be in accordance with recent professional pronouncements.

  • CreatedSeptember 18, 2015
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