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Problem Solving Survival Guide to accompany Financial Accounting, 8th Edition by Donald E. Kieso, Paul D. Kimmel, Jerry J. Weygandt

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EXERCISE 9-6

Purpose: (L.O. 4) This exercise will help you to understand how the sale of a plant asset compares with the sale of inventory.

Houston Merchandising Company sold two items. The following facts pertain:

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Item 1 is an inventory item. Item 2 is a plant asset.

Instructions

Explain the manner of reporting each item on a multiple-step income statement.

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