Reference no: EM13481095

Michael Jordan, controller for the Bozrah Corporation is preparing the companu's income statement at year end. He notes that the company lost a considerable sum on the sale of some equipment it replaced. Since the company has sold equipment routinely in the past, Jordan knows the losses cannot be rported as extaordinary. He also does not want to hightlight it as a material loss since that reflects poorly on him and the company. Jordan reasons that if the company had recorded more depreciation suring the assets' lives, the losses would not be so great. Since depreciation is included among the company's operating expenses, he wants to report the losses along with the company's expenses. With your knowledge of the conceptual framework of accounting and preparation of an income statement and a balance sheet, discuss the soundness of Jordan's proposition. Include any revelant arguments to enhance your position on the issue.