Exercise $2-6$ Income statement presentation $($LO$2-5,$ LO$2-6)$

Krewatch, Inc., Is a vertically integrated manufacturer and retaller of golf clubs and accessorles $($gloves$,$ shoes, bags, etc.$).$ Krewatch maintains separate financial reporting systems for each of its facilities. The company experlenced the following events in $20$X$1$:

$1.$ After several years of production problems at the accessorles manufacturing plant, Krewatch sold the plant to an investor group headed by a former manager at the plant.

$2.$ Krewatch incurred restructuring costs of $\backslash (\backslash$$ $12,562,990\backslash )$ when It eliminated a layer of middle management.

$3.$ Krewatch extinguished $\backslash (\backslash$$ $200\backslash )$ million in $30-$year bonds issued $18$ years ago. Krewatch recognized a gain on this transaction.

$4.$ The company wrote off inventory that was not salable.

$5.$ Equipment was sold at a loss.

Required:

For each event, $($a$)$ specify the appropriate reporting treatment $($consider each event to be material$)$ and $($b$)$ Indicate whether it would be included in income from continuing operations or it would appear on the income statement below that subtotal. Exercise $2-6$ Income statement presentation $($LO$2-5,$ LO$2-6)$

Krewatch, Inc., Is a vertically integrated manufacturer and retaller of golf clubs and accessorles $($gloves$,$ shoes, bags, etc.$).$ Krewatch maintains separate financlal reporting systems for each of its facilities. The company experlenced the following events in $20$X$1$:

$1.$ After several years of production problems at the accessorles manufacturing plant, Krewatch sold the plant to an Investor group headed by a former manager at the plant.

$2.$ Krewatch incurred restructuring costs of $\backslash (\backslash$$ $12,562,990\backslash )$ when it eliminated a layer of middle management.

$3.$ Krewatch extinguished $\backslash (\backslash$$ $200\backslash )$ million in $30-$year bonds issued $18$ years ago. Krewatch recognized a gain on this transaction.

$4.$ The company wrote off inventory that was not salable.

$5.$ Equipment was sold at a loss.

Required:

For each event, $($a$)$ specify the appropriate reporting treatment $($consider each event to be material$)$ and $($b$)$ Indicate whether it would be included in income from continuing operations or it would appear on the income statement below that subtotal.