Question : 57.              Belmont Industries subject to a 35% tax rate and : 1370131

57.              Belmont Industries is subject to a 35% tax rate and has a December 31 year-end.  During 2010, the accountant discovered an error made in 2009 relative to a capital expenditure that was incorrectly expensed. The total pre-tax amount of the error was $67,500. The prior period adjustment to beginning retained earnings will equal:

A)$(67,500)

B)$(23,625)

C)$ 67,500

D)$ 43,875

58.              Colby Enterprses is subject to a 30% tax rate and has a December 31 year-end.  During 2010, the accountant discovered an error made in 2009 relative to an expenditure that was incorrectly classified as an asset when it should have been expensed. The total pre-tax amount of the error was $70,000. The prior period adjustment to beginning retained earnings will be ______ by $_______.

A)reduced        $49,000

B)reduced        $21,000

C)increased      $70,000

D)increased      $49,000

59.              Big River Enterprises is subject to a 40% tax rate and has a December 31 year-end. During 2010, the accountant discovered that in 2009 some interest expense relative to a note payable had not been accrued. The amount of omitted interest totaled $53,800. The prior period adjustment to beginning retained earnings will equal:

A)$(32,280)

B)$(53,800)

C)$ 21,520

D)$ 53,800

60.              Brentwood, Inc.’s Statement of Changes in Owners’ Equity for the year ended December 31, 2010 showed a reduction to prior period adjustment, net of taxes, equal to $41,250. The company has an effective tax rate of 45%. The gross amount of the error was an:

A)understatement of income in the prior year of $18,563

B)overstatement of income in the prior year of $75,000

C)understatement of income in the current year of $22,688

D)overstatement of income in the prior year of  $91,667

61.In 2010 MacFee Inc discovered that its ending inventory in 2007 was too big by $45,000.  How much will MacFee’s beginning retained earnings (Jan. 1, 2010) need to be adjusted to correct this error given a tax rate of 30%.

A)Increase retained earnings $31,500

B)Do not adjust retained earnings

C)Decrease retained earnings by $45,000

D)Decrease retained earnings $31,500.

62.In 2010 Townsend Inc discovered that its ending inventory in 2009 was too big by $95,000.  How much will Townsend’ss beginning retained earnings (Jan. 1, 2010) need to be adjusted to correct this error given a tax rate of 30%.

A)Increase retained earnings $66,500

B)Do not adjust retained earnings

C)Decrease retained earnings by $95,000

D)Decrease retained earnings $66,500.

63.               What item would not be included in comprehensive income?

A)foreign currency translation adjustments

B)unrealized gains & losses

C)dividends to stockholders

D)all would be included in comprehensive income

64.              Name the asset that will most likely pay for a company’s accounts payable.

A)intangible asset

B)accounts receivable

C)equipment

D)prepaid insurance

65.              Which of the following answers would not be classified as a current asset?

A)inventory

B)prepaid insurance

C)common stock

D)cash

66.              What order are current assets classified?

A)liquidity

B)value

C)assets

D)age