Snead, Inc.incurred the following infrequent losses during 2007:

A $70,000 write-down of equipment leased to others.
A $40,000 adjustment of accruals on long-term contracts.
A $60,000 write-off of obsolete inventory.
In its 2007 income statement, what amount should Snead report as total infrequent losses that are not considered extraordinary?
A)$170,000.
B)$130,000.
C)$110,000.
D)$100,000.

Question

Snead, Inc.incurred the following infrequent losses during 2007:

A $70,000 write-down of equipment leased to others.
A $40,000 adjustment of accruals on long-term contracts.
A $60,000 write-off of obsolete inventory.
In its 2007 income statement, what amount should Snead report as total infrequent losses that are not considered extraordinary?
A)$170,000.
B)$130,000.
C)$110,000.
D)$100,000.

Quizplus · Accepted Answer

The write-down of equipment and the write-off of obsolete inventory are both infrequent losses that are not considered extraordinary. The adjustment of accruals on long-term contracts is not an infrequent loss. Therefore, the total amount of infrequent losses that are not considered extraordinary is $70,000 + $60,000 = $130,000.