Assume that the amount of each of the following items is material to the financial statements. Classify each item as either normally recurring (NR) or extraordinary (E).
a. Loss on the disposal of equipment considered to be obsolete because of the development of new technology.
b. Uninsured loss on building due to hurricane damage. The building was purchased by the company in 1910 and had not previously incurred hurricane damage.
c. Gain on sale of land condemned by the local government for a public works project.
d. Uninsured flood loss. (Flood insurance is unavailable because of periodic flooding in the area.)
e. Interest revenue on notes receivable.
f. Uncollectible accounts expense.
g. Loss on sale of investments in stocks and bonds.
Darshita Changed status to publish February 18, 2020
Answer:
| a. Loss on the disposal of equipment considered to be obsolete because of the development of new technology. | normally recurring (NR) |
| b. Uninsured loss on building due to hurricane damage. The building was purchased by the company in 1910 and had not previously incurred hurricane damage. | extraordinary (e,) |
| c. Gain on sale of land condemned by the local government for a public works project. | extraordinary (e,) |
| d. Uninsured flood loss. (Flood insurance is unavailable because of periodic flooding in the area.) | normally recurring (NR) |
| e. Interest revenue on notes receivable. | normally recurring (NR) |
| f. Uncollectible accounts expense. | normally recurring (NR) |
| g. Loss on sale of investments in stocks and bonds. | normally recurring (NR) |
Darshita Changed status to publish February 18, 2020
