An extraordinary loss of $300,000 that results in income tax savings of $90,000 should be reported as an extraordinary loss (net of tax) of $210,000 on the income statement.

Question

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The net of tax extraordinary loss should be reported on the income statement, which is $210,000 ($300,000 - $90,000). This is the amount after taking into account the income tax savings resulting from the loss.

An Extraordinary Loss of $300,000 That Results in Income Tax