In 2017, a corporation had revenues of $100 million; total expenses related to the above revenues (exclusive of federal income taxes) of $80 million; and was subject to federal income taxation at a 50% rate. It also suffered a tax-deductible earthquake loss (its first such loss) of $4 million, sold investment securities (a recurring event) at a gain of $6 million, wrote inventories down by $2 million, and settled for $1.6 million (tax-deductible) litigation brought against it for failure to comply in 2017 with the provisions of a contract to install a battery of missiles. Similar lawsuits have occurred in the past. Which of the following statements isare) true? The gain on the sale of securities should be reported in the income statement at its gross amount as an element of income from normal operations. The inventory loss should be reported in the income statement at its gross amount as an element of income from normal operations. The earthquake loss should be reported at $2 million (54 million less tax effect) as an extraordinary item in the income statement. All of the above answers are correct. Question 9 1 pts The Wilcox Corporation acquired 300 shares of its own $40 par value common stock, all of which had been previously issued at par. The corporation paid $13,200 ($44 per share). Three weeks later it reissued all 300 of these treasury shares, at $42 per share. The entry to record the reissuance of these shares, assuming no previous transactions in treasury stock is: O Cash 12,600 Treasury Stock 12.000 Paid-In Capital-Treasury Stock 600 O Cash Paid-In Capital-Treasury Stock Treasury Stock-Common 12,600 600 13.200 O Cash Retained Earnings Treasury Stock 12,600 600 13,200 Cash Treasury Stock-Common 12,600 12.600