Practice
Check your answer
Write your response and explain your reasoning.
Granite Harbor reports $20,000 income from continuing operations. A reviewer renames it “recurring operating earnings” and says every included item will repeat next year. Critique the claim and reconcile the supplied performance bridge.
Compare your reasoning with the worked answer
Continuing-operations presentation is not a guarantee that each included item recurs or predicts cash. Preserve the authorized component and caption, reconcile $20,000 continuing income plus the stipulated $(3,000) separate loss to $17,000 net income and then add $1,000 OCI to reach $18,000 comprehensive income, and evaluate persistence only with item-specific, multi-period, policy, estimate, segment, and cash evidence.