Homework Answers
1. Under the general rule of revenue recognition, revenue is recognised when the earnings process is complete, and a valid promise of payment has been received.
Answer is d. the earnings process is complete, and a valid promise of payment has been received.
2. Cash disbursement is NOT an acceptable basis for the recognition of expenses.
Answer is b. Cash disbursement
3. Cost of goods sold is subtracted from Sales to arrive at Gross Profit.
Gross Profit = Sales - COGS
On a multiple-step income statement, gains or losses on sale of equipment would be shown after gross profit on sales but before income from continuong operations.
Answer is b. after gross profit on sales but before income from continuong operations.
4. A single-step income statement is a format that combines revenues and gains and subtracts from them expenses and losses, resulting in income from operations.
Answer is c. combines revenues and gains and subtracts from them expenses and losses, resulting in income from operations.
5. When a business segment is discontinued during the year, the gain or loss on disposal should be shown net of applicable income taxes.
Answer is d. should be shown net of applicable income taxes.
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1. Under the general rule of revenue recognition, revenue is recognized when a marketability and market...
ITS8h2 Name: Issourcisse Quiz 3B Directions: Circle the best answers. Use PENCIL only else you will...
ITS8h2 Name: Issourcisse Quiz 3B Directions: Circle the best answers. Use PENCIL only else you will receive a ZERO NO PENS. 1. Under the general rule of revenue recognition, revenue is recognized when a marketability and market price are assured. b. a contractual agreement exists, and cash collection is assured. c/ all related expenses have been incurred. the earnings process is complete, and a valid promise of payment has been received 2. Which of the following is NOT an acceptable...
Using the following list of items, fill in the blanks for where the item belongs on...
Using the following list of items, fill in the blanks for where the item belongs on a multiple-step income statement. Use the Condensed Multiple-Step Income Statement format. You only need earnings per share for net income (don't need to separate out income from continuing operations or discontinued operations). Selling expenses, Cost of goods sold, Net sales, Income tax expense, Gross profit, Income from operations, Administrative expenses, Income before taxes, Discontinued operations, Other revenues and gains, Other expenses and losses, Income...
The following information is related to Sheridan Company for 2020. Retained earnings balance, January 1, 2020...
The following information is related to Sheridan Company for 2020. Retained earnings balance, January 1, 2020 Sales Revenue Cost of goods sold Interest revenue Selling and administrative expenses Write-off of goodwill Income taxes for 2020 Gain on the sale of investments Loss due to flood damage Loss on the disposition of the wholesale division (net of tax) Loss on operations of the wholesale division (net of tax) Dividends declared on common stock Dividends declared on preferred stock $999,600 25,500,000 16,320,000...
Income Statement Format The following information from Belvidere Company's current operations is available: Administrative expenses $82,800...
Income Statement Format The following information from Belvidere Company's current operations is available: Administrative expenses $82,800 Cost of goods sold 556,800 Sales revenue 926,400 Selling expenses 104,400 Interest expense 8,400 Loss from operations of discontinued segment 72,000 Gain on disposal of discontinued segment 48,000 Income taxes: Amount applicable to ordinary operations 69,600 Reduction applicable to loss from operations of discontinued segment 28,800 Amount applicable to gain on disposal of discontinued segment 19,200 Required a. Prepare a multiple-step income statement. (Disregard...
This are the 4 options In 2017, Randa Merchandising, Inc., sold its interest in a chain of wholesale outlets,...
This are the 4 options
In 2017, Randa Merchandising, Inc., sold its interest in a chain of wholesale outlets, taking the company completely out of the wholesaling business. The company still operates its retail outlets. Indicate where each of the following income-related items for this company appears on its 2017 Income statement by selecting the appropriate section in the drop down beside each item. Section 1. income (s) from operating a discontinued segment, or gain (loss) from its disposal Gain...
The following information is available for Marin Inc. for the year ended December 31, 2017: Loss...
The following information is available for Marin Inc. for the
year ended December 31, 2017:
Loss on discontinued operations
$75,000
Retained earnings January 1, 2017
$1,240,000
Rent revenue
87,000
Selling expenses
861,000
Income tax applicable to continuing operations
296,000
Income tax applicable to loss on discontinued operations
28,000
Administrative expenses
512,000
Cost of goods sold
1,674,000
Loss on write-down of inventory
35,000
Sales revenue
3,725,000
Gain on sale of equipment
37,000
Cash dividends declared
221,000
Unrealized gain on available-for-sale securities...
For its fiscal year ending October 31, 2020, Haas Corporation reports the following partial data shown...
For its fiscal year ending October 31, 2020, Haas Corporation reports the following partial data shown below. Income before income taxes $505,000 Income tax expense (25% x $376,000) 94,000 Income from continuing operations 411,000 Loss on discontinued operations 129,000 Net income $282,000 The loss on discontinued operations was comprised of a $56,000 loss from operations and a $73,000 loss from disposal. The income tax rate is 25% on all items. (a) Prepare a correct statement of comprehensive income beginning with...
Shown below is an income statement prepared by a poorly trained bookkeeper. Assume an income tax...
Shown below is an income statement prepared by a poorly trained bookkeeper. Assume an income tax rate of 30% on all items. Ignore EPS. ABC Company Income Statement December 31, 20x1 Sales Revenue $1,192,375 Investment Revenue 9,250 Cost of goods sold (340,375) Selling + Administrative (563,250) Interest expenses (13,000) Loss on Building (Fire Damage) (80,000) Loss on disposal of business segment (32,500) NI 120,750 Prepare a multiple-step income statement in good form. Then answer the questions pertaining to...
Which of the following items would be included in the discontinued operations section of the income...
Which of the following items would be included in the discontinued operations section of the income statement? A. The gain or loss on disposal of the segment. B. Both the income or loss from operating the segment prior to its disposal, and the gain or loss on disposal of the segment. C. Income or loss from operating the segment prior to its disposal. D. Only losses and not gains on the disposal of a segment. 2. All things being equal,...
2) The following incorrect income statement was prepared by the accountant of the Axel Corporation: AXEL...
2) The following incorrect income
statement was prepared by the accountant of the Axel
Corporation:
AXEL CORPORATION
Income Statement
For the Year Ended December 31, 2021
Revenues and gains:
Sales revenue
$
780,000
Interest revenue
51,000
Gain on sale of investments
98,000
Total revenues and gains
929,000
Expenses and losses:
Cost of goods sold
$
420,000
Selling expense
78,000
Administrative expense
98,000
Interest expense
35,000
Restructuring costs
74,000
Income tax expense
56,000
Total expenses and losses
761,000
Net Income
$...
ITS8h2 Name: Issourcisse Quiz 3B Directions: Circle the best answers. Use PENCIL only else you will receive a ZERO NO PENS. 1. Under the general rule of revenue recognition, revenue is recognized when a marketability and market price are assured. b. a contractual agreement exists, and cash collection is assured. c/ all related expenses have been incurred. the earnings process is complete, and a valid promise of payment has been received 2. Which of the following is NOT an acceptable...
Using the following list of items, fill in the blanks for where the item belongs on a multiple-step income statement. Use the Condensed Multiple-Step Income Statement format. You only need earnings per share for net income (don't need to separate out income from continuing operations or discontinued operations). Selling expenses, Cost of goods sold, Net sales, Income tax expense, Gross profit, Income from operations, Administrative expenses, Income before taxes, Discontinued operations, Other revenues and gains, Other expenses and losses, Income...
The following information is related to Sheridan Company for 2020. Retained earnings balance, January 1, 2020 Sales Revenue Cost of goods sold Interest revenue Selling and administrative expenses Write-off of goodwill Income taxes for 2020 Gain on the sale of investments Loss due to flood damage Loss on the disposition of the wholesale division (net of tax) Loss on operations of the wholesale division (net of tax) Dividends declared on common stock Dividends declared on preferred stock $999,600 25,500,000 16,320,000...
This are the 4 options
In 2017, Randa Merchandising, Inc., sold its interest in a chain of wholesale outlets, taking the company completely out of the wholesaling business. The company still operates its retail outlets. Indicate where each of the following income-related items for this company appears on its 2017 Income statement by selecting the appropriate section in the drop down beside each item. Section 1. income (s) from operating a discontinued segment, or gain (loss) from its disposal Gain...
The following information is available for Marin Inc. for the
year ended December 31, 2017:
Loss on discontinued operations
$75,000
Retained earnings January 1, 2017
$1,240,000
Rent revenue
87,000
Selling expenses
861,000
Income tax applicable to continuing operations
296,000
Income tax applicable to loss on discontinued operations
28,000
Administrative expenses
512,000
Cost of goods sold
1,674,000
Loss on write-down of inventory
35,000
Sales revenue
3,725,000
Gain on sale of equipment
37,000
Cash dividends declared
221,000
Unrealized gain on available-for-sale securities...
2) The following incorrect income
statement was prepared by the accountant of the Axel
Corporation:
AXEL CORPORATION
Income Statement
For the Year Ended December 31, 2021
Revenues and gains:
Sales revenue
$
780,000
Interest revenue
51,000
Gain on sale of investments
98,000
Total revenues and gains
929,000
Expenses and losses:
Cost of goods sold
$
420,000
Selling expense
78,000
Administrative expense
98,000
Interest expense
35,000
Restructuring costs
74,000
Income tax expense
56,000
Total expenses and losses
761,000
Net Income
$...
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