Exam 14: The Corporate Income Statement and the Statement of Stockholders Equity

The only possible change in the Deferred Income Taxes account balance for a period is due to the difference between the amount of income taxes expense for that period and the amount of income taxes actually payable to the IRS for the period.

The results of discontinued operations are excluded from operating income on the income statement.

A synonymous phrase for retained earnings is accumulated earnings.

Below are the account balances for Eccles Corporation as of its fiscal year ended April 30, 2010. Prepare a corporate income statement in good form, assuming 5,000 shares of common stock were outstanding during the year.

What are potentially dilutive securities, and how do they relate to earnings per share calculations?

Kagel Corporation computed its actual income taxes payable for 2010 to be $92,000. Because of differences in accounting procedures and income tax rules, the income taxes expense to be reported for 2010 is $107,000. Prepare the entry in journal form without explanation to record the income taxes expense and income taxes payable for 2010.

The term deficit refers to

A corporation is subject to a federal flat income tax rate of 34 percent.

A statement of retained earnings is not as informative as a statement of stockholders' equity.

Ballard Corporation has retained earnings of $200,000. It has 5,000 shares of 6 percent, $100 par value preferred stock outstanding that is callable at 102. The preferred stock is cumulative, and one year of dividends is in arrears. It also has 10,000 shares of $50 par value common stock outstanding. Assume all stock is issued at par. The book value of each share of preferred stock is

A stock dividend will cause an increase in the total number of shares issued and outstanding.

A company would be considered to have a complex capital structure if it had

On a corporate income statement, income from continuing operations

On August 26, 2010, Booth Corporation's board of directors declared a 2 percent stock dividend applicable to the outstanding shares of its $5 par value common stock, of which 150,000 shares are authorized, 130,000 are issued, and 10,000 are held in the treasury. The stock dividend was distributable on September 25 to stockholders of record on September 10. On August 26, the market value of the common stock was $12 per share. On November 26, the board of directors declared a $0.20 per share cash dividend. No other stock transactions have occurred. Record the transactions on August 26, September 10, September 25, and November 26. Make the December 31 entry to close Dividends and Stock Dividends to Retained Earnings.

Diluted earnings per share should be a more conservative (lower) figure than basic earnings per share.

The following facts pertain to Rojas Corporation: On the basis of these facts, compute the amount of net income (loss) for Rojas Corporation for 2010.

Comprehensive income could contain all of the following except

Income taxes expense represents the amount of income taxes

The following facts pertain to Montecello Corporation for 2010: Based on the above facts, net income for 2010 for Montecello Corporation amounted to

A convertible bond is a potentially dilutive security.