Midway Co. had the following transactions during 2006:
- $1,200,000 pretax loss on foreign currency exchange due to a major unexpected devaluation by the foreign government.
- $500,000 pretax loss from discontinued operations of a division.
- $800,000 pretax loss on equipment damaged by a hurricane. This was the first hurricane ever to strike in Midway’s area. Midway also received $1,000,000 from its insurance company to replace a building, with a carrying value of $300,000, that had been destroyed by the hurricane.
What amount should Midway report in its 2006 income statement as extraordinary loss before income taxes?
- $ 100,000
- $1,300,000
- $1,800,000
- $2,500,000