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It is almost midnight on December 31, 20xx, and the bookkeeping program at Crank-M-Up, Inc. is malfunctioning. Instead of producing an income statement, it keeps printing an alphabetical list of accounts: Administrative expenses $215,000 Cost of goods sold 408,500 Extraordinary casualty loss 70,000 Income taxes 54,900 Loss on inventory write-down (nonrecurring) 13,000 Gain on foreign currency translation 19,500 Loss from discontinued operations 30,000 Sales 945,000 Selling expenses 145,000 *The practice essay questions for Section A are original questions and are not released ICMA questions. Questions A. As the new accountant for Crank-M-Up, your first job is to prepare the firm's multiple-step income statement for 20XX with EPS disclosures in accordance with G.A.A.P. Crank-M-Up has 50,000 shares of common stock outstanding and has a 30% federal income tax rate. B. Mark M. Down, the CEO of Crank-M-Up, is confused about the accounting treatment for irregular items on the income statement and wants you to explain: (1) Why GAAP requires special treatment for irregular items; (2) How to determine whether an item is unusual or extraordinary. It is almost midnight on December 31, 20xx, and the bookkeeping program at Crank-M-Up, Inc. is malfunctioning. Instead of producing an income statement, it keeps printing an alphabetical list of accounts: Administrative expenses $215,000 Cost of goods sold 408,500 Extraordinary casualty loss 70,000 Income taxes 54,900 Loss on inventory write-down (nonrecurring) 13,000 Gain on foreign currency translation 19,500 Loss from discontinued operations 30,000 Sales 945,000 Selling expenses 145,000 *The practice essay questions for Section A are original questions and are not released ICMA questions. Questions A. As the new accountant for Crank-M-Up, your first job is to prepare the firm's multiple-step income statement for 20XX with EPS disclosures in accordance with G.A.A.P. Crank-M-Up has 50,000 shares of common stock outstanding and has a 30% federal income tax rate. B. Mark M. Down, the CEO of Crank-M-Up, is confused about the accounting treatment for irregular items on the income statement and wants you to explain: (1) Why GAAP requires special treatment for irregular items; (2) How to determine whether an item is unusual or extraordinary

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