MCQ-00208 Coffey Corp.'s trial balance of income statement accounts for the year ended December 31 as follows: Net sales Cost of goods sold Selling expenses Administrative expenses Interest expense Hurricane damage Gain on debt extinguishment Totals Debit OC. $200,000 O D. $161,000 $ 960,000 235,000 150,000 25,000 40,000 Credit $1,600,000 10,000 $1,410,000 $1,610,000 Coffey's uses U.S. GAAP and has an income tax rate of 30%. The gain on debt extinguishment is considered usual and recurring part of Coffey's operations. The hurricane is considered an unusual and infrequent event. Coffey prepares a multiple-step income statement. Net income is: OA. $168,000 OB. $140,000
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
212.
Subject : - Accounting
I understand everything except what category Gain on Debt Extinguishment should be under on the income statements?
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