1: Special Item Accounting 20 marks) Cambridge Corp is a construction machinery manufacture. The following in the consolidated income statement of Cambridge Corp and subsidiaries Cambridge Corporation and Sabsidiaries Consolidated income statement (5 million) Revenue Cost of goods sold 2016 2017 2018 1,000 1.000 1,000 (550) (520) (500) 2019 2020 1,000 1.000 1-4809 1450) 450 450 500 350 Expenses Selling and administration expenses (150) (180) (2009 Restructuring charge (400) PPE impairment charge (300) Interest expenses (100) (100) (300) (100) income before tax 200 200 (500) 300 300 income tax expense (70 (70 175 305 (105) Income before continuing operations 130 130 (325) 195 195 Gain from extinguishment of debt 500 Less from operating discontinued (10) segment Gain from sale of discontinued segment Net income 130 150 175 195 Notes from the annual report peovided the following additional information: (1) The PPE impairment charpe in 2018 came from the fact that a construction equipment was estimated to have useful life of 6 years with no salvage value, but actually became useless at the end of year 3. (2) The objective of restructuring is to reduce future labor costs and improved efficiency, and it was expected that this restructuring would benefit future TWO (2) years (3) The marginal tax rate is 35% 1. With the worksheet below, determine the core income and permanent income of the company for all 5 years. (10 marks) Adjustments: Care income Adjustments hems 2016 2017 2018 2019 3029 Permanent income 2. Compare the level and growth rate of net income, cone income and permanent income for the 5 years and comment on the likelihood that the company use non-recurring items to manage camings (10 marks)