The following income statement was prepared by Walters Corporation a seller of equipment for the year ended Dec-31, 2013

Walters Corporation

Comprehensive Income Statement

For the year ended Dec-31, 2013

Sales revenue (Note: 1)... $310,000

Cost of goods sold..(140,000)

Gross profit. 170,000

Less: Operating Expenses.

Selling and administrative expenses50,000

Loss on sale of Investment 15,000 (65,000)

Other income and expense

Gain on sale of plant assets........ 40,000

Depreciation expense..... (15,000)

Rent Expense..... (6,000)

Dividend revenue. 50,000

Gain on disposal of a business division (net of tax). 30,000

Loss due to earthquake (Note-2) ... (5,000) 94,000

Income from operations.... 199,000

Interest expense. (6,000)

Income before tax.....193,000

Tax Expense.(15,000)

Net Income ....178,000

Discontinued operations

Loss on operation of discontinued division (Note-3).. (10,000)

Net Income before extraordinary Item.168,000

Extra ordinary item

Loss on Impairment of Equipment.2,000

Restructuring Cost.4,000 (6,000)

Net Income after extraordinary item . 162,000

Basic EPS . $13.5/share

Diluted EPS...$ 15/share

Attributable to

Non-controlling interest.... 40,500

Shareholders of Walters.... 121,500

Explanation of Notes

Note 1: Including in the Sales

1. $ 50,000 is related to goods sent on consignment
2. $ 15,000 is related to goods sold with a buy back arrangement with restriction on the use of this equipment by Walter.
3. $ 20,000 in respect of layaway sales representing initial deposit made by customers.
4. $ 60,000 to a customer whom title has been transferred but goods are not delivered on customers request.

Note 2: The loss is unexpected as this place has never experienced earthquake in past 30 years

Note-3 The tax in respect of loss on operations of discontinued division is amounting $ 2,000

Required:

1. Comment on the above Notes e whether things are treated properly or not;

2. Highlight any weakness regarding the presentation or treatment of any item in the presented Comprehensive Income statement not covered in notes.