Accounting 201 Chapter 4

d) all of the above

An item that should be classified as an other income is: a) write-off of goodwill b) gains from transactions involving a meteor strike c) losses from moving a plant to another city d) all of the above

c) should be reported at $80000

Cost of goods sold 120000 Dividends revenue 5000 income tax expense 12000 operating expenses 46000 Sales revenue 200000 In Mortenson's multiple-step income statement, gross profit a) should not be reported b) should be reported at 27000 c) should be reported at 80000 d) should be reported at 85000

c) on the face of the income statement

Where must earnings per share be disclosed in the financial statements to satisfy generally accepted accounting principles: a) on the face of the statement of retained earnings b) in the footnotes to the financial statements c) on the face of the income statement d) either a or c

d) as part of the statement of stockholder's equity

Which disclosure method do most companies use to display the components of other comprehensive income: a) combined statement of retained earnings b) second income statement c) combined statement of comprehensive income d) as part of the statement of stockholders' equity

d) a change from FIFO to LIFO and a change from straight-line to double-declining balance

Which of the following is a change in accounting principle: a) a change in the estimated service life of machinery b) a change from FIFO to LIFO c) A change from straight-line to double-declining balance d) a change from FIFO to LIFO and a change from straight-line to double-declining balance

b) prior period adjustments

A company is not required to report a per share amount on the face of that income statement for which of the following items: a) net income b) prior period adjustment c) income from continuing operations- after tax d) discontinued operations

d) no,yes

A correction of an error in prior periods' income will be reported: in the income statement, net of tax a) yes, yes b) no, no c) yes, no d) no, yes

c) no, yes

A material item which meets the criteria for a discontinued operation should be shown in the net income statement: net of tax, disclosed separately a) no, no b) yes, yes c) no, yes d) yes, no

b) $162400

Arreaga Corp. has a tax rate of 40% and income before non-operating items of 464000. It also has the following items unusual loss 74000 discontinued operations loss 202000 gain on disposal of equipment 16000 change in accounting principle increasing prior year's income 106000 What is the amount of income tax expense Arreaga would report on its income statement: a) 185600 b) 162400 c) 198400 d) 124000

c) $12175000

Gross billings for merchandise sold by Lang Company to its customers last year amounted to $12720000; sales returns and allowances were $370000, sales discounts were $175000, and freight-out was $140000. Net sales last year from Lang Company were: a) 12720000 b) 12350000 c) 12175000 d) 12035000

d) 2.50

In 2012, Linz Corporation reported an Discontinued Operation Loss of 1000000, net of tax. It declared and paid preferred stock dividends of 100000 and common stock dividends of 300000. During 2012, Linz had a weighted average of 400000 common shares outstanding. Compute the effect of the loss, net of tax, on earnings per share: a) 1.50 b) 1.75 c) 2.25 d) 2.50

a) very unlikely to ever result in real or realized income or loss

In order to be classified as other comprehensive income, an event or transaction should/is: a) very unlikely to ever result in real or realized income or loss b) unusual in nature ad infrequent, but it need not be material c) infrequent and material in amount, but it need not be unusual in nature d) unusual in nature and material, but it need not be infrequent

a)32400

Lantos Company had a 40% tax rate. Given the following pre-tax amounts, what would be the income tax expense reported on the face of the income statement Sales revenue 300000 Cost of Goods Sold 180000 Salaries and Wages Expense 24000 Depreciation expense 33000 Dividends revenue 27000 utilities expense 3000 Discontinued operation loss 30000 Interest expense 6000 a) 32400 b) 20400 c) 21600 d) 9600

a) $0

Manning Company has the following items: write-down of inventories, 360000; loss on disposal of Sports Division, 555000; nd loss due to strike, 339000. Ignoring income taxes, what total amount should Manning Company report as extraordinary losses: a) 0 b) 555000 c) 699000 d) 894000

c) 6.60

Net Income 750000 Dividends on common stock 210000 Dividends on preferred stock 90000 Weighted average common shares outstanding 100000 Benedict should report earnings per share of: a) 4.50 b) 5.40 c) 6.60 d) 7.50

c) $184500

Ortiz Co. had the following account balances: sales revenue $180000 cost of goods sold 90000 salaries and wages expense 15000 depreciation expense 30000 dividends revenue 6000 utilities expense 12000 rent revenue 30000 interest expense 12000 sales returns and allow. 16500 advertising expense 19500 What would Ortiz report as total expenses in a single-step income statement? a) 190500 b) 201000 c) 184500 d) 94500

c) 90000, 105000

Sandstrom Corporation has an Discontinued loss of 150000, an unusual gain of 105000 and a tax rate of 40%. At what amount should Sandstrom report each item: Discontinued loss, Unusual gain a) 150000, 105000 b) 150000, 63000 c) 90000, 105000 d) 90000, 63000

d) all of these

Which of the following is an acceptable method of presenting the income statement: a) a single-step income statement b) a multiple-step income statement c) a consolidated statement of income d) all of these

d) it does not imply that one type of revenue or expense has priority over the multiple-step income statement

Which of the following is an advantage of the single-step income statement over the multiple-step income statement: a) it reports gross profit for the year b) expenses are classified by function c) it matches costs and expenses with related revenues d) it does not imply that one type of revenue or expense has priority over the multiple-step income statement

b) revising the estimated life of equipment from 10 years to 8 years

Which of the following is an example of managing earnings down: a) changing the estimated bad debts from 3% to 2.5% of sales b) Revising the estimated life of equipment from 10 years to 8 years c) not writing off obsolete inventory d) reducing research and development expenditures

b) unrealized gains on available-for-sale securities

Which of the following is included om comprehensive income: a) investments by owners b) unrealized gains on available-for-sale securities c) distributions to owners d) changes in accounting principles

b) office salaries expense

Which of the following is not a selling expense: a) advertising expense b) office salaries expense c) freight out d) store supplies consumed

d) its purpose it to relate the income tax expense to the items which affect the amount of tax

Which of the following is true about intraperiod tax allocation: a) it arises because certain revenue and expense items appear in the income statement either before or after they are included in the tax return b) it is required for extraordinary items and cumulative effect of accounting changes but not for prior period adjustments c) its purpose is to allocate income tax expense evenly over a number of accounting periods d) its purpose is to relate the income tax expense to the items which affect the amount of tax

d) discontinued operations

Which of the following items would be reported net of tax on the face on the income statement: a) prior period adjustment b) unusual gain c) cumulative effect of a change in an accounting principle d) discontinued operations

d) unrealized gain resulting from an "available for sale" stock

Which of these is generally an example of an other comprehensive income: a) loss incurred because of a strike by employees b) write-off of deferred marketing costs believed to have no future benefit c) loss resulting from the devaluation of the your diamond inventory d) unrealized gain resulting from an "available for sale" stock

d) material losses resulting from correction of errors related to prior periods

Which one of the following types of losses is excluded from the determination of net income in income statements: a) material losses resulting from transactions in the company's investments account b) material losses resulting from unusual sales of assets not acquired for resale c) material losses resulting from the write-off of intangibles d) material losses resulting from correction of errors related to prior periods