Question :
44. Doogle Corporation sold a segment of its operations in 2009 : 1229415
44. Doogle Corporation sold a segment of its operations in 2009 and suffered an extraordinary loss in 2010. Which of the following would be the most useful in attempting to predict Doogle’s performance for 2011?
A. Doogle’s income from continuing operations in 2009 and 2010.
B. Doogle’s net income in 2009 and 2010.
C. Doogle’s total assets at the end of 2010.
D. Doogle’s retained earnings at the end of 2010.
45. On January 31, 2009, Village Bank had 500,000 shares of $2 par value common stock outstanding. On that date, the company declared a 14% stock dividend when the market price of the stock was $37 per share. The immediate effect of this dividend upon Village Bank was:
A. A reduction in cash of $2,590,000.
B. A reduction in retained earnings of $2,590,000.
C. A reduction in retained earnings of $140,000.
D. A liability to the stockholders of $140,000.
46. Execucomp Corporation’s financial statements in the current year show a loss from discontinued operations, a prior period adjustment, and an extraordinary gain. If Execucomp’s income statement is prepared according to generally accepted accounting principles (as illustrated in your text), which of the following four items would appear second in sequence in the income statement?
A. Prior period adjustment.
B. Income from continuing operations.
C. Loss from discontinued operations.
D. Extraordinary gain.
47. Of the items listed, which would appear closest to the bottom of the income statement?
A. Extraordinary items.
B. Prior period adjustment.
C. Income from continuing operations.
D. Discontinued operations.
48. Large stock dividends tend to:
A. Increase stock prices.
B. Have no effect upon stock prices.
C. Keep stock prices down.
D. Describe total assets.
49. The purpose of developing the subtotals “Income before Extraordinary Items” and “Income from Continuing Operations” in an income statement is to:
A. Assist investors in forecasting future operating results.
B. Increase the amount of reported net income.
C. Decrease the amount of income subject to income taxes.
D. Provide investors with the information necessary to compute earnings per share.
50. To qualify as an extraordinary item, a gain or loss must:
A. Affect the income of a prior period.
B. Be larger in amount than any other item in the income statement.
C. Be material in amount, unusual in nature, and not expected to recur.
D. Be associated with a segment of the business that has been discontinued during the current period.
51. Which of the following would be classified as an extraordinary item?
A. A large gift given to the company.
B. A loss from obsolete inventory.
C. A loss from a natural disaster that affects the company at infrequent intervals.
D. A loss from an enacted law that made inventory unsalable.
52. An example of an extraordinary gain or loss is:
A. A large loss arising from inability to collect an account receivable from a bankrupt customer.
B. A large gain from disposal of a segment of the business.
C. A gain or loss from sale of an expensive machine no longer needed in the business.
D. A loss due to the expropriation of assets by a foreign government.
53. In computing earnings per share, the number of shares used is:
A. The year-end number of shares outstanding.
B. The beginning of the year number of shares outstanding.
C. The average of the beginning and the year-end number of shares outstanding.
D. The weighted average of shares outstanding for the year.
