Indicate the financial statement treatment for each of the scenarios listed below. When providing your response use the following letter code for your selections: Ordinary item on the income statement Discontinued operations Unusual item on the income statement Adjustment to prior year’s retained earnings _____ 1. Recognition of revenue earned last year, inadvertently omitted from last year's income statement. _____ 2. The company sold one of its warehouses at a loss. _____3. Settlement of a court case involving the federal government, related to income taxes of three years ago. The company is continually involved in various adjustments with the federal government related to its taxes. _____ 4. A loss incurred from expropriation – the company-owned resources in South America which were taken over by a dictator unsympathetic to Canadian business interests. _____ 5. The company failed to record depreciation in the previous year. _____ 6. Discontinuance of all production in Canada. The manufacturing operations were relocated to Honduras. _____ 7. Loss on sale of investments. The company last sold some of its investments two years ago. _____8. Loss on the disposal of a segment of the business.
Indicate the financial statement treatment for each of the scenarios listed below. When providing your response use the following letter code for your selections:
- Ordinary item on the income statement
- Discontinued operations
- Unusual item on the income statement
- Adjustment to prior year’s retained earnings
_____ 1. Recognition of revenue earned last year, inadvertently omitted from last year's income statement.
_____ 2. The company sold one of its warehouses at a loss.
_____3. Settlement of a court case involving the federal government, related to income taxes of three years ago. The company is continually involved in various adjustments with the federal government related to its taxes.
_____ 4. A loss incurred from expropriation – the company-owned resources in South America which were taken over by a dictator unsympathetic to Canadian business interests.
_____ 5. The company failed to record depreciation in the previous year.
_____ 6. Discontinuance of all production in Canada. The manufacturing operations were relocated to Honduras.
_____ 7. Loss on sale of investments. The company last sold some of its investments two years ago.
_____8. Loss on the disposal of a segment of the business.
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