The flight instructor reported that he was conducting a lesson in takeoffs and landings, and go-around procedures with the student pilot at the controls. During one particular go-around, the student retracted the flaps too far and the instructor stressed the importance of using the proper flap settings. On the subsequent downwind, the tower advised a crosswind from the south gusting to 18 knots. During the approach, the airplane drifted left of the runway centerline, so he called for the student to execute a go around. The student pilot applied full power and reduced flaps from 40° to 10° (25º prescribed in the go-around procedure). When the flight instructor noticed that the airplane was not climbing, and the student was not correcting the course, the flight instructor took the flight controls. The flight instructor attempted to recover, but the airplane was in a nose-high attitude and struck the ground. The airplane then lifted off the ground, flying slowly toward a sign, the instructor "pulled up to avoid the sign'" but the airplane struck the sign, aerodynamically stalled, and impacted the ground to the right of the runway.

The airplane sustained substantial damage to the left wing.

The flight instructor reported that there were no preaccident mechanical failures or malfunctions with the airplane that would have precluded normal operation.

The automated weather observation station located on the accident airport reported that, at the time of the accident, the wind was from 110° at 8 knots. The airplane was landing on runway 7L.

Federal Aviation Administration's Airplane Flying Handbook, FAA-H-8083-3B, contains a section titled "Go-Arounds (Rejected Landings)" which states:

After establishing the proper climb attitude and power settings, be concerned first with flaps and secondly with the landing gear (if retractable). When the decision is made to perform a go-around, takeoff power is applied immediately and the pitch attitude changed so as to slow or stop the descent. After the descent has been stopped, the landing flaps are partially retracted or placed in the takeoff position as recommended by the manufacturer. Caution must be used in retracting the flaps. Depending on the airplane's altitude and airspeed, it is wise to retract the flaps intermittently in small increments to allow time for the airplane to accelerate progressively as they are being raised. A sudden and complete retraction of the flaps could cause a loss of lift resulting in the airplane settling into the ground.