5. Flam Co. reported a retained earnings balance of $400,000 at December 31, 2014. In August, 2015, Flam determined that insurance premiums of $60,000 for the three-year period beginning January 1, 2014, had been paid and fully expensed in 2014. Flam has a 25% income tax rate. What amount should Flam report as adjusted beginning retained earnings in its 2015 statement of retained earnings?

6. Flop Co. had the following transactions during 2014: a. $1,200,000 pretax loss on foreign currency exchange due to a major unexpected devaluation by the foreign government. b. $500,000 pretax loss from discontinued operations of a division. c. $800,000 pretax loss on equipment damaged by a hurricane. This was the first hurricane ever to strike in Flop's area. Flop also received$1,000,000 from its insurance company to replace a building, with a carrying value of $330,000, that had been destroyed by the hurricane. What amount should Flop report in its 2014 income statement as extraordinary loss before income taxes?

7. On November 1, 2015, management of Flop Corporation committed to a plan to dispose of Flip Company, a major subsidiary. The disposal meets therequirements for classification as discontinued operations. The carrying value of Flip Company was $8,000,000 and management estimated the fairvalue less costs to sell to be $6,500,000. For 2015, Flip Company had a loss of $200,000. How much should Flop Corporation present as loss from discontinued operations before the effect of taxes in its income statement for 2015?

8. A company buys ten shares of securities at $1,000 each on January 15, year 1. The securities are classified as available-for-sale. The fair value of the securities increases to $1,250 per share as of December 31, year 1. The company does not elect to use the fair value option for reporting available-for-sale securities. Assume no dividends are paid and that the company has a 30% tax rate. What is the amount of the holding gainarising during the period that is classified in other comprehensive income for the period ending December 31, year 1?