Irregular Items - IRREGULAR ITEMS , statement.There, 1....

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IRREGULAR ITEMS As an aid in determining sustainable income, we identify irregular items by type on the income  statement. There, companies report two types of irregular items:  1.   Discontinued operations 2.   Extraordinary items Irregular items are reported net of income taxes. That is, a company first calculates income tax  expense for the income before irregular items. Then it calculates income tax expense for each  individual irregular item. The general concept is, “Let the tax follow the income or loss.” Discontinued Operations To downsize its operations,  General Dynamics Corp.  sold its missile business to  Hughes Aircraft Co.  for $450 million. In its income statement, General Dynamics reported the sale in a separate section  entitled “Discontinued operations.”  Discontinued operations  refers to the disposal of a significant  component of a business, such as the elimination of a major class of customers or an entire activity. 
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This note was uploaded on 11/08/2011 for the course ACCOUNTING ac 201 taught by Professor - during the Spring '11 term at Montgomery.

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Irregular Items - IRREGULAR ITEMS , statement.There, 1....

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