Question :
84. A statement of stockholders’ equity discloses each of the following : 1229397
84. A statement of stockholders’ equity discloses each of the following except:
A. The market value of the stockholders’ equity at the end of the year.
B. The cost of treasury stock owned at the end of the year.
C. Net income for the current year.
D. The amount of cash dividends declared during the current year.
85. Which of the following items would be included in comprehensive income but not reported as a component of net income?
A. A lower-of-cost-or-market write-down of inventory.
B. A material loss due to natural disaster.
C. An unrealized gain on the portfolio of available-for-sale marketable securities.
D. A gain on the sale of a segment of the business.
86. Which of the following items would be included in the discontinued operations section of the income statement?
A. Income or loss from operating the segment prior to its disposal.
B. The gain or loss on disposal of the segment.
C. Both the income or loss from operating the segment prior to its disposal, and the gain or loss on disposal of the segment.
D. Only losses and not gains on the disposal of a segment.
87. Family Fashions Corporation discontinued Kid-Choice, its entire line of children’s clothing, in November of 2009. Prior to the disposal, Kid-Choice generated a loss of $600,000 (net of tax) for the period from January through the sale date. Because of the value of the real estate and machinery, there was a gain of $850,000 (net of tax) on the actual sale. How should this situation be reported in the financial statements of Family Fashions for 2009?
A. A $250,000 gain should be included in the 2009 income statement as an extraordinary item.
B. A $600,000 loss should be included in income from operations and a $850,000 gain should be reported in the “discontinued operations” section of the income statement.
C. A $250,000 adjustment to beginning retained earnings should be in the statement of retained earnings.
D. A $250,000 gain should be in the “discontinued operations” section of the income statement.
88. Sovereign Foods suffered a $1,500,000 loss (net of tax) when the FDA prohibited the sale of food products containing red dye no. 3. On its other products, Sovereign Foods had net sales of $6,580,000 and costs and other expenses of $6,505,000. Which of the following statements is not true? (Ignore taxes)
A. Sovereign Foods reports a net loss of $1,425,000 for the current year.
B. Sovereign Foods reports income before extraordinary items of $75,000.
C. Sovereign Foods combines the $1,500,000 loss with its other costs and expenses of $6,505,000, since this item does not qualify for any special disclosure.
D. Sovereign Foods shows the $1,500,000 loss in a separate section of the income statement as an extraordinary item.
89. Corona Corporation’s financial statements for the current year include the following:
On the basis of this information, net income for the current year is:
A. $1,359,600.
B. $818,400.
C. $1,485,000.
D. $1,234,200.
90. During the year 2009, Tosco Corporation suffered an $800,000 loss when its factory was destroyed in a flood. Assuming the corporate income tax rate is 36%, what amount will Tosco report as an extraordinary loss on its income statement for 2009? Assume floods are not common in this area.
A. $800,000.
B. $512,000.
C. $288,000.
D. Nothing, since this does not qualify as an extraordinary item.
91. General Corporation was organized on January 1 and issued 500,000 shares of common stock on that date. On July 1, an additional 200,000 shares were issued for cash. Net income for the year was $5,184,000. Net earnings per share amounted to:
A. $7.41.
B. $7.98.
C. $8.41.
D. $8.64.
92. On January 1, 2009, Carleton Corporation had 55,000 shares of $6 par value common stock outstanding. On March 31, 2009, Carleton issued an additional 10,000 shares in exchange for a building. What number of shares will be used in the computation of basic earnings per share for the year 2009?
A. 55,000.
B. 65,000.
C. 62,500.
D. 62,000.
93. Platinum Company reports net income of $520,000 for 2009 and declared a cash dividend of $1 per share on each of its 100,000 shares of common stock outstanding. What are earnings per share for 2009?
A. $5.20 per share.
B. $1.00 per share.
C. $1.20 per share.
D. $4.80 per share.
