Bradshaw Company experienced a loss that was deemed to be both unusual in nature and infrequent in occurrence. How should Bradshaw report this item in accordance with IFRS?
Under IFRS, extraordinary items should be reported separately.
In accounting, the term extraordinary items denote the non-recurring and abnormal gains and losses associated with a business entity. It also includes the revenues and expenses that are non-operating.
The IFRS does not disclose the unusual and infrequent events as extraordinary items. IFRS requires separate disclosure for extraordinary items. Such information can either be reported on the face of the income statement or in the notes section linked with the income statement of a business concern.
(Income Statement, EPS) Presented below are selected ledger accounts of Tucker Corporation as of December 31, 2017.
Administrative expenses 100,000
Selling expenses 80,000
Net sales 540,000
Cost of goods sold 210,000
Cash dividends declared (2017) 20,000
Cash dividends paid (2017) 15,000
Discontinued operations (loss before income taxes) 40,000
Depreciation expense, not recorded in 2016 30,000
Retained earnings, December 31, 2016 90,000
Effective tax rate 30%
The following account balances were included in the trial balance of Twain Corporation at June 30, 2017.
Sales revenue $1,578,500
Depreciation expense (office furniture and equipment) $7,250
Sales discounts $31,150
Cost of goods sold $896,770
Property tax expense $7,320
Salaries and wages expense (sales) $56,260
Bad debt expense (selling) $4,850
Sales commissions $97,600
Maintenance and repairs expense (administration) $9,130
Travel expense (salespersons) $28,930
Delivery expense $21,400
Office expense $6,000
Entertainment expense $14,820
Sales returns and allowances $62,300
Telephone and Internet expense (sales) $9,030
Dividends received $38,000
Depreciation expense (sales equipment) $4,980
Interest expense $18,000
Maintenance and repairs expense (sales) $6,200
Income tax expense $102,000
Miscellaneous selling expenses $4,715
Depreciation understatement due to error—2014 (net of tax) $17,700
Office supplies used $3,450
Telephone and Internet expense (administration) $2,820
Dividends declared on preferred stock $9,000
Dividends declared on common stock $37,000
The Retained Earnings account had a balance of $337,000 at July 1, 2016. There are 80,000 shares of common stock outstanding.
(a) Using the multiple-step form, prepare an income statement and a retained earnings statement for the year ended June 30, 2017.
The financial records of LeRoi Jones Inc. were destroyed by fire at the end of 2017. Fortunately, the controller had kept certain statistical data related to the income statement as follows.XXX
From the foregoing information prepare an income statement for the year 2017 in single-step form.
Stacy Corporation had income from operations of $7,200,000. In addition, it suffered an unusual and infrequent pretax loss of $770,000 from a volcano eruption, interest revenue of $17,000, and a write-down on buildings of $53,000. The corporation's tax rate is 30%. Prepare a partial income statement for Stacy beginning with income from operations. The corporation had 5,000,000 shares of common stock outstanding during 2017.
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