Agler Corp.had the following infrequent transactions during 2007:

A $150,000 gain from selling the only investment Agler has ever owned.
A $210,000 gain on the sale of equipment.
A $70,000 loss on the write-down of inventories.
In its 2007 income statement, what amount should Agler report as total infrequent net gains that are not considered extraordinary?
A)$80,000.
B)$140,000.
C)$290,000.
D)$360,000.

Question

Agler Corp.had the following infrequent transactions during 2007:

A $150,000 gain from selling the only investment Agler has ever owned.
A $210,000 gain on the sale of equipment.
A $70,000 loss on the write-down of inventories.
In its 2007 income statement, what amount should Agler report as total infrequent net gains that are not considered extraordinary?
A)$80,000.
B)$140,000.
C)$290,000.
D)$360,000.

Quizplus · Accepted Answer

The $150,000 gain from selling the investment and the $210,000 gain on the sale of equipment both count as infrequent gains, but neither is considered extraordinary because they were not unusual or rare for Agler. The $70,000 loss on the write-down of inventories also counts as an infrequent item, but it is a loss rather than a gain. Therefore, the total infrequent net gain that is not considered extraordinary is $150,000 + $210,000 = $360,000, but we need to subtract the $70,000 loss to get $290,000. Therefore, the correct answer is B.