A Review of the December 31, 2007, Financial Statements of Baden

question 39

Multiple Choice

A review of the December 31, 2007, financial statements of Baden Corporation revealed that under the caption "extraordinary losses," Baden reported a total of $515,000.Further analysis revealed that the $515,000 in losses was comprised of the following items: (1) Baden recorded a loss of $150,000 incurred in the abandonment of equipment formerly used in the business.
(2) In an unusual and infrequent occurrence, a loss of $250,000 was sustained as a result of hurricane damage to a warehouse.
(3) During 2007, several factories were shut down during a major strike by employees, resulting in a loss of $85,000.
(4) Uncollectible accounts receivable of $30,000 were written off as uncollectible.
Ignoring income taxes, what amount of loss should Baden report as extraordinary on its 2007 income statement?

• A)$150,000.
• B)$250,000.
• C)$400,000.
• D)$515,000.

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