During 2006, Peg Construction Co. recognized substantial gains from
- An increase in value of a foreign customer’s remittance caused by a major foreign currency revaluation.
- A court-ordered increase in a completed long-term construction contract’s price due to design changes.
Should these gains be included in continuing operations or reported as an extraordinary item in Peg’s 2006 income statement?
align=”left”>
|
Gain from major currency revaluation |
Gain from increase in contract’s price |
|
|
a. |
Continuing operations |
Continuing operations |
|
b. |
Extraordinary item |
Continuing operations |
|
c. |
Extraordinary item |
Extraordinary item |
|
d. |
Continuing operations |
Extraordinary item |