Question

Chase Corp. had the following unusual transactions during 2020: A $450,000 gain from selling the only investment Chase has ever owned. A $630,000 gain on the sale of equipment. A $210,000 loss on the write-down of inventories.In its 2020 income statement, what amount should Chase report as total unusual net gains?

Answer 1

Chase Corp. should report a total of $870,000 as unusual net gains in its 2020 income statement, calculated by adding the gains from the sale of investment and equipment and subtracting the loss from the write-down of inventories.

Step-by-step explanation:

The student asked what amount Chase Corp. should report as total unusual net gains for the year 2020. To calculate this, we need to consider the gains from the sale of investment and equipment and the loss from the write-down of inventories. The gain from the sale of the investment is $450,000, and the gain on the sale of equipment is $630,000. The loss on the write-down of inventories is $210,000. To find the total unusual net gains, we simply add the gains and subtract the loss:

1. Add the gains from the investment and the equipment: $450,000 + $630,000 = $1,080,000.
2. Subtract the loss from the write-down of inventories: $1,080,000 - $210,000 = $870,000.

Therefore, Chase Corp. should report a total of $870,000 as unusual net gains in its 2020 income statement.