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During the second quarter of 1988, Buzz Company sold a piece of equipment at a $12,000 gain. What portion of the gain should Buzz report in its income statement for the second quarter of 1988?
Suggested Answer: A
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Choice 'a' is correct. $12,000.
Rule: The entire amount of an 'extraordinary gain or loss' or an 'unusual or infrequently occurring item,' e.g., a gain or loss from sale of fixed assets, should be reported during the period (quarter) incurred.
Choices 'b', 'c', and 'd' are incorrect. The full gain should be reported in the second quarter when it occurred.
9 comments · newest first
TR
Trinidad
11 months ago
I thought equipment sales had different rules.
LA
Lashandra
12 months ago
Nope, it’s definitely $12,000. No doubt about it!
XE
Xenia
12 months ago
Wait, are you sure it’s not just $6,000?
PO
Portia
12 months ago
Totally agree, it’s all taxable income!
MA
Matt
1 year ago
Buzz should report the full $12,000 gain.
KA
Karl
1 year ago
The Drive Box needs to be powered down? That's an interesting detail. I'll make sure to verify that before attempting the drive replacement.
AR
Art
1 year ago
I think the answer is streaming telemetry, since it's built for real-time data and fits the push model perfectly.
LI
Linn
1 year ago
I've got this one! The Monitoring service and the Configuration Logging service are the two FMA services that have an extra database connection besides the Site database.
OW
Owen
1 year ago
Okay, I think I've got this. The key is to look at the highest risk test or bug report for each subsystem, since that will determine the overall risk level. Time to crunch the numbers!