In its 2018 financial report, Meeks Company reported $850,000 under the line item extraordinary losses on the

Question:

In its 2018 financial report, Meeks Company reported $850,000 under the line item “extraordinary losses” on the income statement. The company’s tax rate is 35 percent. The footnote pertaining to extraordinary losses indicates that the $850,000 loss, before tax, is composed of the following items:
1. A loss of $260,000 incurred on a warehouse in Florida damaged in a hurricane.
2. A loss of $150,000 incurred when Meeks sold the assets of a business segment.
3. A loss of $225,000 incurred when a warehouse in Iowa was blown up by a disgruntled employee.
4. Accounts receivable written off in the amount of $125,000.
5. A loss of $90,000 incurred when one of the company’s distribution centers in Arizona was damaged by a flood.

REQUIRED:
Discuss how each of these items should be disclosed in the financial statements, including whether or not they should be disclosed net of tax.

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