Question :
147.Alpha’s Bunny Barn has experienced a $60,000 loss due to : 1312003
147.Alpha’s Bunny Barn has experienced a $60,000 loss due to tornado damage to its inventory. Tornados have never before occurred in this area. Assuming that the company’s tax rate is 30%, what amount will be reported for this loss on the income statement?
a.$60,000
b.$42,000
c.$18,000
d.$54,000
148.Wing Company reported income before taxes of $900,000 and an extraordinary loss of $250,000. Assume that the company’s tax rate is 30%. What amounts will be reported on the income statement for income before irregular items and extraordinary items, respectively?
a.$630,000 and $250,000
b.$630,000 and $175,000
c.$650,000 and $250,000
d.$650,000 and $175,000
149.Krug Corporation has income before taxes of $900,000 and an extraordinary gain of $300,000. If the income tax rate is 25% on all items, the income statement should show income before irregular items and extraordinary items, respectively, of
a.$600,000 and $300,000.
b.$600,000 and $225,000.
c.$675,000 and $300,000.
d.$675,000 and $225,000.
150.Hook Inc. has an investment in available-for-sale securities of $80,000. This investment experienced an unrealized loss of $5,000 during the current year. Assuming a 35% tax rate, the effect of this loss on comprehensive income will be
a.no effect.
b.$80,000 increase.
c.$28,000 decrease.
d.$5,000 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.ACME Company reports income before income taxes of $2,400,000 and had an extra-ordinary loss of $800,000. If the tax rate is 30%,
a.the income before the extraordinary item is $1,920,000.
b.the extraordinary loss would be reported on the income statement at $800,000.
c.the income before the extraordinary item is $1,680,000.
d.the extraordinary loss will be reported at $240,000.
153.Eaton, Inc. disposes of an unprofitable segment of its business. The operation of the segment suffered a $360,000 loss in the year of disposal. The loss on disposal of the segment was $180,000. If the tax rate is 30%, and income before income taxes was $2,250,000,
a.the income tax expense on the income before discontinued operations is $513,000.
b.the income from continuing operations is $1,575,000.
c.net income is $1,710,000.
d.the losses from discontinued operations are reported net of income taxes at $270,000.
154.Each of the following is an extraordinary item except the
a.effects of major casualties, if rare in the area.
b.effects of a newly enacted law or regulation.
c.expropriation of property by a foreign government.
d.losses attributable to labor strikes.
155.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 segment of a business.
156.Which one of the following would be classified as an extraordinary item?
a.Expropriation of property by a foreign government
b.Losses attributed to a labor strike
c.Write-down of inventories
d.Gains or losses from sales of equipment
