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
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