147.Ester’s Bunny Barn has experienced a $80,000 loss due to discontinuing one of its divisions. Assuming that the company’s tax rate is 30%, what amount will be reported for this loss on the income statement?
a.$80,000
b.$56,000
c.$24,000
d.$72,000
148.Wenger Company reported income before taxes of $1,200,000 and a discontinued operations loss of $300,000. Assume that the company’s tax rate is 30%. What amounts will be reported on the income statement for income from continuing operations and a discontinued operations loss, respectively?
a.$840,000 and $300,000
b.$840,000 and $210,000
c.$990,000 and $300,000
d.$990,000 and $210,000
149.Kandy Kane Corporation has income before taxes of $1,200,000 and a discontinued operations gain of $300,000. If the income tax rate is 25% on all items, the income statement should show income from continuing operations and a discontinued operations gain, respectively, of
a.$975,000 and $300,000.
b.$975,000 and $225,000.
c.$900,000 and $300,000.
d.$900,000 and $225,000.
150.Hardy Inc. has an investment in non-trading securities of $120,000. This investment experienced an unrealized loss of $10,000 during the current year. Assuming a 35% tax rate, the effect of this loss on comprehensive income will be
a.no effect.
b.$120,000 increase.
c.$42,000 decrease.
d.$10,000 decrease.
151.The disposal of a significant component of a business is called
a.a change in accounting principle.
b.an extraordinary item.
c.an other expense.
d.discontinued operations.
152.ABC Company reports income before income taxes of $2,400,000 and had a discontinued operations loss of $800,000. If the tax rate is 30%, the
a.income from continuing operations is $1,920,000.
b.discontinued operations loss would be reported on the income statement at $800,000.
c.income from continuing operations is $1,680,000.
d.discontinued operations loss will be reported at $240,000.
153.Evers, Inc. disposes of an unprofitable division of its business. The operation of the division suffered a $600,000 loss in the year of disposal. The loss on disposal of the division was $300,000. If the tax rate is 30%, and income before income taxes was $3,750,000,
a.the income tax expense on the income before discontinued operations is $858,000.
b.the income from continuing operations is $2,625,000.
c.net income is $2,850,000.
d.the losses from discontinued operations are reported net of income taxes at $450,000.
154.The discontinued operations section of the income statement refers to
a.discontinuance of a product line.
b.the income or loss on products that have been completed and sold.
c.obsolete equipment and discontinued inventory items.
d.the disposal of a significant component of a business.
155.A loss on the write down of obsolete inventory should be reported as
a."other income and expense."
b.part of discontinued operations.
c.an operating expense.
d.part of gross profit.
156.Each of the following is a factor affecting quality of earnings
except
a.alternative accounting methods.
b.improper recognition.
c.pro forma income.
d.discontinued operations