The following financial statement was prepared by employees of Walters Corporation.

Note 1: New styles and rapidly changing consumer preferences resulted in a £71,500 loss on the disposal of discontinued styles and related accessories.
Note 2: The corporation sold an investment in marketable securities at a loss of £39,050. The corporation normally sells securities of this nature.
Note 3: The corporation sold one of its warehouses at an £86,350 loss Instructions Identify and discuss the weaknesses in classification and disclosure in the income statement above. You should explain why these treatments are weaknesses and what the proper presentation of the items would be in accordance with IFRS.

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Revenues WALTERS CORPORATION INCOME STATEMENT YEAR ENDED DECEMBER 31, 2015 Gross sales, including sales taxes 1,044,300 Less: Returns, allowances, and cash discounts 56,200 Net sales 988,100 Dividends, interest, and purchase discounts Recoveries of accounts written off in prior years 30,250 13,850 Total revenues 1,032,200 Costs and expenses Cost of goods sold, including sales taxes 465,900 Salaries and related payroll expenses Rent Delivery expense and freight-in Bad debt expense Total costs and expenses Income before unusual items 60,500 19,100 3,400 27,800 576,700 455,500 Unusual items Loss on discontinued styles (Note 1) 71,500 Loss on sale of marketable securities (Note 2) Loss on sale of warehouse (Note 3) 39,050 86,350 Total unusual items 196,900 Net income Net income per ordinary share 258,600 2.30