1Provincial Inc. reported the following before-tax income statement items:Operating income$570,000Loss on discontinued operations95,000Provincial has a 34% income tax rate. Provincial would report the following amount of income tax expense as a separately stated line item in the income statement:Multiple Choice$180,540.$193,800.$32,300.$19,040.2On August 1, 2018, Rocket Retailers adopted a plan to discontinue its catalog sales division, which qualifies as a separate component of the business according to GAAP regarding discontinued operations. The disposal of the division was expected to be concluded by June 30, 2019. On January 31, 2019, Rocket’s fiscal year-end, the following information relative to the discontinued division was accumulated:Operating loss Feb. 1, 2018–Jan. 31, 2019$122,000Estimated operating losses, Feb. 1–June 30, 201970,000Impairment of division assets at Jan. 31, 201918,000In its income statement for the year ended January 31, 2019, Rocket would report a before-tax loss on discontinued operations of:Multiple Choice$(122,000).$(192,000).$(52,000).$(140,000).3Schneider Inc. had salaries payable of $62,000 and $90,400 at the end of 2017 and 2018, respectively. During 2018, Schneider recorded $621,700 in salaries expense in its income statement. Cash outflows for salaries in 2018 were:Multiple Choice$621,700.$650,100.$593,300.$531,300.4Excerpts from Hulkster Company’s December 31, 2018 and 2017, financial statements are presented below:20182017Accounts receivable$78,000$55,000Merchandise inventory47,00073,000Net sales305,900300,000Cost of goods sold152,000127,000Total assets463,000424,000Total shareholders’ equity278,000244,000Net income61,00047,000Hulkster’s 2018 profit margin is (rounded): (Round your answer to 1 decimal places.)Multiple Choice19.9%.21.9%.13.2%.7.6%.5Excerpts from Hulkster Company’s December 31, 2018 and 2017, financial statements are presented below:20182017Accounts receivable$70,000$51,000Merchandise inventory43,00065,000Net sales375,100360,000Cost of goods sold144,000123,000Total assets455,000420,000Total shareholders’ equity270,000240,000Net income55,00043,000Hulkster’s 2018 return on shareholders’ equity is: (Round your answer to 1 decimal places.)Multiple Choice14.7%.21.6%.20.8%.10.9%.6The statement of cash flows reports cash flows from the activities of:Multiple Choiceoperating, purchasing, and investing.borrowing, paying, and investing.financing, investing, and operating.using, investing, and financing.7Selected information from the 2018 accounting records of Dunn’s Auto Dealers is as follows:Cost of furniture purchased for cash$8,000Proceeds from bank loan100,000Repayment of bank loan (includes interest of $4,000)44,000Proceeds from sale of equipment5,000Cash collected from customers320,000Purchase of stock of another corporation as an investment20,000Common stock issued for cash200,000 In its 2018 statement of cash flows, Dunn’s should report net cash inflows from financing activities of:Multiple Choice$260,000$265,000$60,000$256,000Item8Which of the following items would not be included as a cash flow from operating activities in a statement of cash flows?Multiple ChoiceCollections from customers.Interest on note payable.Purchase of equipment.Purchase of inventory.9The multiple-step format of the income statement reports a series of intermediate subtotals such as gross profit, operating income, and income before taxes.True or False10A company could improve its return on assets by increasing its income or by increasing its total assets.True or False11When a material error is discovered in prior financial statements:rev: 10_26_2017_QC_CS-106221Multiple Choiceprior financial statements are restated to their correct amounts.assets and liabilities in the current period are restated to their appropriate levels.prior income effects are adjusted to the current period’s beginning balance of retained earnings.all of these answer choices are correct.12Arrow Printers paid $2,000 interest on short-term notes payable, $10,000 interest on long-term bonds, and $6,000 in dividends on its common stock. Arrow would report cash outflows from activities, as follows:Multiple ChoiceOperating, $2,000; financing, $16,000.Operating, $0; financing, $18,000.Operating, $12,000; financing, $6,000. Operating, $18,000; financing, $0.
Recent Comments