Answer
1. This should be classified as an extraordinary item because it meets two conditions of an extraordinary item, i.e. infrequent and unusual in occurrence.
2. This should be classified as a loss rather than an extraordinary item. Such losses would not be taken as unusual for a business entity.
3. This should be classified as an extraordinary loss because it meets two conditions of an extraordinary item, i.e. infrequent and unusual in occurrence.
4. This should be classified as a loss or gain, but not extraordinary. This is because since the company sustains a portfolio of such securities, the loss or gain would not be taken as unusual in nature.
5. This should be classified as a loss or gain, but not extraordinary. Business practices show such sales are not unusual or infrequent in occurrence.
6. Material losses on the elimination of debt should not be listed as an extraordinary item.
7. This should be classified as a loss, but not extraordinary. Loss is not a rare occurrence considering the environment in which the business operates.
8. This should not be classified as an extraordinary item because though floods may seem like an extraordinary item, it is specified in this case that they occur in every 3-4 years.
Work Step by Step
1. This should be classified as an extraordinary item because it meets two conditions of an extraordinary item, i.e. infrequent and unusual in occurrence.
2. This should be classified as a loss rather than an extraordinary item. Such losses would not be taken as unusual for a business entity.
3. This should be classified as an extraordinary loss because it meets two conditions of an extraordinary item, i.e. infrequent and unusual in occurrence.
4. This should be classified as a loss or gain, but not extraordinary. This is because since the company sustains a portfolio of such securities, the loss or gain would not be taken as unusual in nature.
5. This should be classified as a loss or gain, but not extraordinary. Business practices show such sales are not unusual or infrequent in occurrence.
6. Material losses on the elimination of debt should not be listed as an extraordinary item.
7. This should be classified as a loss, but not extraordinary. Loss is not a rare occurrence considering the environment in which the business operates.
8. This should not be classified as an extraordinary item because though floods may seem like an extraordinary item, it is specified in this case that they occur in every 3-4 years.
