Nigel Corporation reported income from continuing operations before taxes and before adjustment of the transactions below in the amount of $1,000,000. A review of the 2009 income statement revealed several items that appeared to be incorrectly categorized. The following items were flagged:
a. Recorded a loss of $29,000 due to a vandalism attack by a gang on one of the company warehouses; vandalism attacks have occurred at least once per year since the company began operations
b. Incurred an unusual and infrequent hurricane loss of $41,000 to a company warehouse
c. Closed all five of the company's supermarkets in Manhattan after bag boys went on strike for an extended period of time; shutdown expenses totaled $38,000
d. Floods from overflowing toilets on the upper floors of a downtown office building in Denver caused more than $8 million in repairs. Flooding toilets are rare in this area and have never occurred in office buildings in Denver before. Insurance coverage paid $8.6 million to replace the damaged portions of the building.
Nigel has a 30% tax rate. Calculate income from continuing operations. For any item that is NOT a component of continuing operations, state how it would be reported.

Question

Quizplus · Accepted Answer

The Answer of Nigel Corporation reported income from continuing operations before taxes and before adjustment of the transactions below in the amount of $1,000,000. A review of the 2009 income statement revealed several items that appeared to be incorrectly categorized. The following items were flagged:
a. Recorded a loss of $29,000 due to a vandalism attack by a gang on one of the company warehouses; vandalism attacks have occurred at least once per year since the company began operations
b. Incurred an unusual and infrequent hurricane loss of $41,000 to a company warehouse
c. Closed all five of the company's supermarkets in Manhattan after bag boys went on strike for an extended period of time; shutdown expenses totaled $38,000
d. Floods from overflowing toilets on the upper floors of a downtown office building in Denver caused more than $8 million in repairs. Flooding toilets are rare in this area and have never occurred in office buildings in Denver before. Insurance coverage paid $8.6 million to replace the damaged portions of the building.
Nigel has a 30% tax rate. Calculate income from continuing operations. For any item that is NOT a component of continuing operations, state how it would be reported.

Nigel Corporation Reported Income from Continuing Operations Before Taxes and Before