Betsy Kirkland,Inc.incurred a flood loss during the first quarter of 2009 that is deemed both unusual and infrequent.The loss is considered immaterial to the twelve-month period,but is material in amount relative to the first quarter.The proper accounting treatment in the first quarterly interim statement is to:

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According to US GAAP, a loss that is unusual and infrequent should be classified as an extraordinary item. As the loss is material to the first quarter, it should be recorded in the first quarter as an extraordinary loss, net of income taxes. Furthermore, since the loss is not material to the twelve-month period, it need not be recorded in the annual statement. Instead, the loss should be disclosed in a separate note or on the income statement to ensure that investors are aware of the impact of the loss on the company's financial performance. Therefore, Choice E is the best option.