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.
Instructions
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.

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KLEIN CORPORATION Income Statement Year Ended December 31, 2014 Sales revenue Gross sales revenue, including sales taxes $1.044,300 56,200 988,100 30,250 13,850 1,032,200 Less: Sales returns, and allowances Net sales revenue Dividend revenue, interest income, and purchase discounts Recoveries of accounts written off in prior years Total revenues Operating expenses Cost of goods sold Salaries and wages expense Rent Freight-in and freight-out Bad debt expense Appropriation of retained earnings for possible inventory losses 465,900 60,500 19,100 3,400 24,000 3,800 576,700 455,500 Total operating expenses Income before unusual items Unusual items Loss on discontinued styles (Note 1) Loss on sale of fair value-net income investments (Note 2) Loss on sale of warehouse (Note 3) Tax assessments for 2013 and 2012 (Note 4) 37,000 39,050 86,350 34,500 196,900 $ 258,600 Total unusual items Net income Net income per common share $ 2.30