11Which of the following statements is TRUE?
A) Appropriations of retained earnings require journal entries, but restrictions on retained earnings do not.
B) No journal entries are needed to either appropriate or restrict retained earnings.
C) Both appropriations and restrictions of retained earnings require journal entries.
D) Restrictions on retained earnings must be journalized, but appropriations do not need to be journalized.
1Gains and losses from the disposal of old plant and equipment are reported as other gains or losses in the multi-step income statement.
2The sale or other disposition of a segment of a business is recorded as an extraordinary gain or loss.
3Public companies are required to publish financial statements, but privately held companies are generally not required to do so.
4Prior period adjustments are shown as an adjustment to the beginning balance of Retained earnings, as reported on the statement of retained earnings.
5Comprehensive income is the company’s change in total stockholders’ equity from all sources other than its owners, and sometimes includes items not found on the income statement.
6Certain types of transactions, other than dividend payments, that are NOT included in the income statement, but have an effect on retained earnings would be treated as part of comprehensive income.
7Comprehensive income is equal to the net income of a company, excluding the effects of discontinued operations and extraordinary items.
8RT Corp. shows a loss from flooding of $235,000 for the year. Flooding is not uncommon in the area, and so this loss will be included in operating income.
9Companies are NOT allowed to combine the income statement and the statement of retained earnings, but must show them as two separate reports.
10Which of the following BEST describes
operating income?
A) The gains and losses from transactions that are not part of the normal operations of the business
B) The income or loss from segments of the business that have been sold or terminated
C) The income or loss generated from unusual or infrequent events
D) The income or loss generated from the normal operations of the business
11Which of the following best describes
other gains (losses)
on the income statement?
A) The gains and losses from transactions that are not part of the normal operations of the business
B) The income or loss from segments of the business that have been sold or terminated
C) The income or loss generated from unusual and infrequent events
D) The income or loss generated from the normal operations of the business
12Which of the following best describes
extraordinary items
on the income statement?
A) The gains and losses from transactions that are not part of the normal operations of the business
B) The income or loss from segments of the business that have been sold or terminated
C) The income or loss generated from unusual and infrequent events
D) The income or loss generated from the normal operations of the business
13Which of the following best describes
discontinued operations
on the income statement?
A) The gains and losses from transactions that are not part of the normal operations of the business
B) The income or loss from segments of the business that have been sold or terminated
C) The income or loss generated from unusual or infrequent events
D) The income or loss generated from the normal operations of the business
14For the year 2013, Foxmore Company reports the following items as part of their financial results:
Sales revenues from regular business operations
|
$3,000,000
|
Cost of goods sold
|
900,000
|
Operating expenses from their regular business operations
|
600,000
|
Gain on disposal of several items of property, plant & equipment
|
15,000
|
Income tax expense on continuing operations
|
330,000
|
Loss on the termination of a discontinued business segment, net of tax
|
120,000
|
Losses on damage caused by earthquake, net of tax
|
280,000
|
How much is total operating income (loss)?
A) $1,065,000
B) $1,500,000
C) $1,515,000
D) $1,185,500
15For the year 2013, Foxmore Company reports the following items as part of their financial results:
Sales revenues from regular business operations
|
$3,000,000
|
Cost of goods sold
|
900,000
|
Operating expenses from their regular business operations
|
600,000
|
Gain on disposal of several items of property, plant & equipment
|
15,000
|
Income tax expense on continuing operations
|
330,000
|
Loss on the termination of a discontinued business segment, net of tax
|
120,000
|
Losses on damage caused by earthquake, net of tax
|
280,000
|
How much is the income (loss) from continuing operations, before tax?
A) $1,065,000
B) $1,500,000
C) $1,515,000
D) $1,185,500
16For the year 2013, Foxmore Company reports the following items as part of their financial results:
Sales revenues from regular business operations
|
$3,000,000
|
Cost of goods sold
|
$ 900,000
|
Operating expenses from their regular business operations
|
$ 600,000
|
Gain on disposal of several items of property, plant & equipment
|
$ 15,000
|
Income tax expense on continuing operations
|
$ 330,000
|
Loss on the termination of a discontinued business segment, net of tax
|
$ 120,000
|
Losses on damage caused by earthquake, net of tax
|
$ 280,000
|
How much is the income (loss) from continuing operations, after tax?
A) $1,065,000
B) $1,500,000
C) $1,515,000
D) $1,185,000
17For the year 2013, Foxmore Company reports the following items as part of their financial results:
Sales revenues from regular business operations
|
$3,000,000
|
Cost of goods sold
|
900,000
|
Operating expenses from their regular business operations
|
600,000
|
Gain on disposal of several items of property, plant & equipment
|
15,000
|
Income tax expense on continuing operations
|
330,000
|
Loss on the termination of a discontinued business segment, net of tax
|
120,000
|
Losses on damage caused by earthquake, net of tax
|
280,000
|
How much is the income (loss) before extraordinary items?
A) $1,065,000
B) $1,500,000
C) $1,515,000
D) $1,185,000
18For the year 2013, Foxmore Company reports the following items as part of their financial results:
Sales revenues from regular business operations
|
$3,000,000
|
Cost of goods sold
|
900,000
|
Operating expenses from their regular business operations
|
600,000
|
Gain on disposal of several items of property, plant & equipment
|
15,000
|
Income tax expense on continuing operations
|
330,000
|
Loss on the termination of a discontinued business segment, net of tax
|
120,000
|
Losses on damage caused by earthquake, net of tax
|
280,000
|
How much is the “bottom line” net income (loss)?
A) $1,065,000
B) $1,500,000
C) $1,515,000
D) $ 785,000
19At January 1, 2014, Foxmore Company had 80,000 shares of common stock outstanding and no preferred stock. During the year, they issued 40,000 additional shares of common stock. At December 31, 2014, Foxmore had 120,000 shares of common stock outstanding, and no preferred stock. In addition, Foxmore reported the following results for the year 2014:
Sales revenues from regular business operations
|
$3,000,000
|
Cost of goods sold
|
900,000
|
Operating expenses from their regular business operations
|
600,000
|
Gain on disposal of several items of property, plant & equipment
|
15,000
|
Income tax expense on continuing operations
|
330,000
|
Loss on the termination of a discontinued business segment, net of tax
|
120,000
|
Losses on damage caused by earthquake, net of tax
|
280,000
|
At December 31, 2014, how much is the earnings per share for income (loss) from continuing operations?
(Please round all calculations to the nearest cent.)
A) $(1.20)
B) $ 7.85
C) $10.65
D) $11.85
20 At January 1, 2014, Foxmore Company had 80,000 shares of common stock outstanding and no preferred stock. During the year, they issued 40,000 additional shares of common stock. At December 31, 2014, Foxmore had 120,000 shares of common stock outstanding, and no preferred stock. In addition, Foxmore reported the following results for the year 2014:
Sales revenues from regular business operations
|
$3,000,000
|
Cost of goods sold
|
900,000
|
Operating expenses from their regular business operations
|
600,000
|
Gain on disposal of several items of property, plant & equipment
|
15,000
|
Income tax expense on continuing operations
|
330,000
|
Loss on the termination of a discontinued business segment, net of tax
|
120,000
|
Losses on damage caused by earthquake, net of tax
|
280,000
|
At December 31, 2014, how much is the earnings per share for income (loss) from discontinued operations? (Please round all calculations to the nearest cent.)
A) $(1.20)
B) $ 7.85
C) $10.65
D) $(2.80)