Acct Exam 2

Misty Company reported the following before-tax items during the current year: Sales-$600, Operating Expense -250, Restructuring charges-20, Extraordinary loss-50. Misty's effective tax rate is 40%. What is misty's income before extraordinary items

($600 - 250 - 20) x (1 -.4) = $198

For Grimmett Company, the following information is available: -Capitalized leases $600,000 -Trademarks 195,000 -Long-term receivables 225,000 In Grimmett's balance sheet, intangible assets should be reported at a. $195,000. b. $225,000. c. $795,000. d. $825,000.

195,000

The major elements of the income statement are a. revenues, expenses, gains, and losses. b. operating section, nonoperating section, discontinued operations, and cumulative effect. c. revenues, irregular items, and general expenses. d. revenue, cost of goods sold, selling expenses, and general expense.

a. revenues, expenses, gains, and losses.

Which of the following is not a selling expense? a. Advertising expense b. Office salaries expense c. Freight-out d. Store supplies consumed

b. office salaries expense

The distinction between operating and nonoperating income relates to: A. continuity of income. B. primary activities of the reporting entity. C. consistency of income stream. D. reliability of measurements.

b. primary activities of the reporting entity

Benedict Corporation reports the following information: -Net income $750,000 -Dividends on ordinary shares 210,000 -Dividends on preference shares 90,000 -Weighted average ordinary shares outstanding 250,000 Benedict should report earnings per share of: a. $4.50. b.$5.40 c.$6.60. d.$7.50.

c. 6.60

In a multiple-step income statement for a retail company, all of the following are included in the operating section except: a. sales b. cost of goods sold c. dividend revenue d. administrative and selling expenses

c. dividend revenue

Current assets are presented in the balance sheet in a. descending order of their balances. b. ascending order of their balances. c. order of their liquidity. d. reverse order of their liquidity.

c. order of liquidity

Which of the following events will appear in the cash flows from financing activities section of the statement of cash flows? a. Cash purchases of equipment. b. Cash purchases of bonds issued by another company. c. Cash received as repayment for funds loaned. d. Cash purchase of treasury stock.

cash purchase of treasury stock

Which item below is not a current liability? a)stock dividends distributable b) trade accounts payable c) the currently maturing portion of long-term debt d) unearned revenue

stock dividends distributable

Income taxes are allocated to each of the following except a. continuing operations b.discontinued operations c.prior period adjustments d.balance sheet adjustments.

d. balance sheet adjustments

Each of the following would be reported as items of other comprehensive income except: A. foreign currency translation adjustments. B. net unrealized holding gains on investments. C. deferred gains from derivatives. D. gains from the sale of equipment.

d. gains from the sale of equipment

The current assets section of the balance sheet should include a. patents. b. inventory. c. goodwill. d.machinery.

inventory

Activities that involve the cash effects of making and collecting loans and acquiring and disposing of property, plant, and equipment are classified as: a. operating activities. b. financing activities. c. noncash activities. d. investing activities.

investing activities

Operating cash flows would exclude:

payment of dividends