91影视

Serial No.

Treatment

Explanation

(a)

Income statement as an extraordinary gain

Gain on sale of securities is non-operating gain; therefore should be reported as extraordinary gain in the income statement.

(b)

Income statement as operating expense

Bonus to employees as a percentage of net profit is an operational expense; hence should be reported in the income statement.

(c)

Retained earnings statement as an adjustment in the beginning

Additional depreciation will reduce the prior year's net income; hence, it should be adjusted at the beginning of the retained earnings statement.

(d)

Income statement as operating income

Receipt of rent is part of business operations; therefore, it should be reported as operating income.

(e)

Income statement as an extraordinary loss

A pending lawsuit is a nonrecurring loss; therefore should be reported as an extraordinary loss in the income statement.

(f)

Income statement as operating expense

Allowance for doubtful accounts is related to the ordinary course of business; hence it should be shown as an operating expense.