Perlman Land Development, Inc. and Sheehan Manufacturing should not report the sale in the same way. Perlman should report revenues of 160, 000 and expenses of 100,000 (70,000+30,000). On the other hand, Sheehan manufacturing should record a gain of 60,000 (160,000-100,000), because the transaction was of incidental activity.
Work Step by Step
However, it is important to note that the different classification doesn't affect the net income, which constantly remains at 60,000.