Modern Detailing,Inc.has incurred a $50,000 loss on property due to an earthquake.Earthquakes are rare in this region.What amount will be reported for this loss on the company's income statement,assuming a 30% tax rate? How will the loss be classified on the income statement?

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Quizplus · Accepted Answer

The loss is classified as an extraordinary loss due to its unusual and infrequent nature. After accounting for the 30% tax rate, the net loss reported is $35,000 ($50,000 - 30% of $50,000).