The income statement usually classifies the results of various transactions and events in one of the following
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Question:
The income statement usually classifies the results of various transactions and events in one of the following 3 sections:
- Income from continuing operations
- Income, gains and losses from discontinuing operations.
- Extraordinary Items
Identify each of the transaction or events that follow, and state any assumptions you may feel necessary.
- Salary of the corporation president.
- Gain from sale of the warehouse, no longer needed in operations.
- Loss from the sale of a farm business.
- Income from the current year of the farm business before its sale.
- Loss in excess of insurance proceeds on an automobile destroyed during an accident.
- Loss of funds in a bank account in a foreign country as a result of the government confiscation.
- Interests and dividends received from investments in marketable securities.
- Uninsured loss of a house in Spain due to a volcanic eruption.
- Lawyers expense in preparation of a staff restructuring to as a consequence of orders reducing in 50%, that will take place on the next year related to a steel manufacturing business.
- Extraordinary depreciation in the machinery for the steel manufacturing business, after the realization of an impairment test.
Related Book For
Introduction to Financial Accounting
ISBN: 978-0133251036
11th edition
Authors: Charles Horngren, Gary Sundem, John Elliott, Donna Philbrick
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