Question

Logan Corp.'s trial balance of income statement accounts for the year ended December 31, 2012 included the following: Sales revenue Cost of goods sold Administrative expenses Loss on disposal of equipment Sales commission expense Interest revenue Freight-out Loss due to earthquake damage Bad debt expense Totals Debit Credit $280,000 $100,000 50.000 18,000 16.000 10,000 6,000 24,000 6,000 $220,000 Other information: Logan's income tax rate is 30%. Finished goods inventory: January 1, 2012 $160,000 December 31, 2012 140,000 On Logan's multiple-step income statement for 2012, Extraordinary loss is

Answer 1

Logan Corp

Extraordinary Loss is $24,000.

This includes Loss on Disposal of Equipment totalling $18,000 and Freight-out Loss due to earthquake damage totalling $6,000.

Step-by-step explanation:

Extraordinary Loss is the business loss resulting from some transactions that are considered to be highly unusual , occur only rarely, and do not result from normal operating activities.

An example of an extraordinary loss is the damage caused by an earthquake and other natural disasters, where their occurrences are uncommon..

But extraordinary loss is no longer stated separately according to US GAAP.