The following income statement items appeared on the

Reference no: EM13578914

The following income statement items appeared on the adjusted trial balance of Schembri Manufacturing Corporation for the year ended December 31, 2013 ($ in 000s): sales revenue, $17,300; cost of goods sold, $7,200; selling expenses, $1,400; general and administrative expenses, $900; interest revenue, $150; interest expense, $250. Income taxes have not yet been accrued. The company%u2019s income tax rate is 40% on all items of income or loss. These revenue and expense items appear in the company%u2019s income statement every year. The company%u2019s controller, however, has asked for your help in determining the appropriate treatment of the following nonrecurring transactions that also occurred during 2013 ($ in 000s). All transactions are material in amount.

1.Investments were sold during the year at a loss of $320. Schembri also had unrealized gains of $420 for the year on investments.
2. One of the company%u2019s factories was closed during the year. Restructuring costs incurred were $1,300.

3.An earthquake destroyed a warehouse causing $1,000 in damages. The event is considered to be unusual and infrequent.

4.During the year, Schembri completed the sale of one of its operating divisions that qualifies as a component of the entity according to GAAP. The division had incurred a loss from operations of $660 in 2013 prior to the sale, and its assets were sold at a gain of $1,600.

5.in 2013, the company%u2019s accountant discovered that depreciation expense in 2012 for the office building was understated by $300.
6. Foreign currency translation losses for the year totaled $320.

Reference no: EM13578914

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