Carter Hawley Hale Stores Inc was one of the largest department store retailers in the United States. At the end of fiscal 1989, the company operated...

Carter Hawley Hale Stores Inc was one of the largest department store retailers in the United States. At the end of fiscal 1989, the company operated 113 stores in the sunbelt regions of the country. The company's division included The Broadway, with 43 stores in Southern California and 11 stores in the southwest and Emporium, with 22 stores in the greater San Francisco bay area. On October 17, 1989, a 7.1 Richter scale earthquake caused significant amounts of monetary damage to the San Francisco Bay Area. This was the largest earthquake to hit the bay area since the quake in 1906 destroyed much of San Francisco. California is lined with many active earthquake faults. Hundreds of small earthquake occur each year throughput the state. The emporium division of CHHS suffered extensive damage as a result of the October 17 earthquake. Twelve of the twenty two stores were closed for varying periods of time, with the Oakland store hardest hit. In total, uninsured damage was $27.5 million ($16,5 million after tax benefits). For the fiscal; year ending August 4, 1990, CHHS reported an after tax loss of $9.47 million before considering the earthquake loss. Total Revenue for the year were $2.857 billion"Assume that you are the controller for Carter hawley hale stores. The Chief financial office of Carter Hawley Hale stores has asked you to prepare a short memo from giving your recommendations as to the proper reporting of the earthquake damage costs in the income statement for the year ending august 4, 1990.""