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On July 1, year 1, an erupting volcano destroyed Coastal Corporation’s operating plant, resulting in a loss of $1,500,000, of which only $500,000 was covered by insurance. Coastal’s income tax rate is 30%. How should this event be shown in Coastal’s income statement for the year ended December 31, year 1? A. As an extraordinary loss of $1,000,000. B. As an extraordinary loss of $700,000, net of $300,000 income tax. C. As an operating loss of $1,000,000. D. As an operating loss of $700,000, net of $300,000 income tax. |