Question 1

Comprehensive income reports an expanded version of income to include certain types of gains and losses not included in traditional income statements.

Accepted Answer

A) True 
 B)False

Question 2

The following information (in $ millions) comes from the Annual Report of Saratoga Springs Co. for the year ending 12/31/2018:

Required: Compute the following amounts for Saratoga Springs Co.
-Its return on assets for 2018. Round your answer to one decimal place, e.g., 0.1234 as 12.3%.

Accepted Answer

The answer of The following information (in $ millions) comes...

Question 3

The Maytag Corporation's income statement includes income from continuing operations and a loss on discontinued operations. Earnings per share information would be provided for:

Accepted Answer

A)  net income only. 
B)  income from continuing operations and net income only. 
C)  income from continuing operations, loss on discontinued operations, and net income only. 
D)  none of these answer choices are correct.

Question 4

The following information (in $ millions) comes from the Annual Report of Saratoga Springs Co. for the year ending 12/31/2018:

Required: Compute the following amounts for Saratoga Springs Co.
-Its return on stockholders' equity for 2018. Round your answer to one decimal place, e.g., 0.1234 as 12.3%.

Accepted Answer

The answer of The following information (in $ millions) comes...

Question 5

On August 1, 2018, Rocket Retailers adopted a plan to discontinue its catalog sales division, which qualifies as a separate component of the business according to GAAP regarding discontinued operations. The disposal of the division was expected to be concluded by June 30, 2019. On January 31, 2019, Rocket's fiscal year-end, the following information relative to the discontinued division was accumulated:  In its income statement for the year ended January 31, 2019, Rocket would report a before-tax loss on discontinued operations of:

Accepted Answer

A)  $(115,000). 
B)  $(195,000). 
C)  $(65,000). 
D)  $(125,000).

Question 6

List at least four operating activities that would be reported in the statement of cash flows for Walmart. Assume the use of the direct method.

Accepted Answer

The answer of List at least four operating activities that...

Question 7

The decomposition of return on assets illustrates why some companies with low profit margins can be very profitable if their asset turnover is high.

Accepted Answer

A) True 
 B)False

Question 8

Provincial Inc. reported the following before-tax income statement items:  Provincial has a 30% income tax rate. Provincial would report the following amount of income tax expense as a separately stated line item in the income statement:

Accepted Answer

A)  $198,000. 
B)  $180,000. 
C)  $168,000. 
D)  $150,000.

Question 9

A company is effectively leveraging when:

Accepted Answer

A)  the return on assets exceeds the return on shareholders' equity. 
B)  the return on shareholders' equity exceeds the return on assets. 
C)  the return on shareholders' equity is increasing. 
D)  the return on assets is increasing.

Question 10

Excerpts from Hulkster Company's December 31, 2018 and 2017, financial statements are presented below:  
-Hulkster's 2018 average collection period is:

Accepted Answer

A)  73 days. 
B)  104 days. 
C)  109 days. 
D)  128 days.

Question 11

The trial balance of Kroeger Inc. included the following accounts as of December 31, 2018:

Kroeger had 300,000 shares of stock outstanding throughout the year. Income tax expense has not yet been accrued. The effective tax rate is 40%.
-Required: Prepare a 2018 separate statement of comprehensive income for Kroeger Inc.

Accepted Answer

The answer of The trial balance of Kroeger Inc. included...

Question 12

A change in accounting principle that is implemented using the modified retrospective approach includes:

Accepted Answer

A)  implementing the change in the current period only and not adjusting for the cumulative effects on prior periods. 
B)  applying the new standard to the adoption period only, and recording the cumulative adjustment for prior periods to the current period's beginning balance of retained earnings. 
C)  restating financial statements of all periods presented as if the new standard had been used in those periods. 
D)  not accounting for the change in the current period or prior periods.

Question 13

Excerpts from Hulkster Company's December 31, 2018 and 2017, financial statements are presented below: 
- Hulkster's 2018 receivables turnover is:

Accepted Answer

A)  2.85. 
B)  4.70. 
C)  5.00. 
D)  10.63.

Question 14

Changes in estimates are accounted for using the prospective approach.

Accepted Answer

A) True 
 B)False

Question 15

The Filzinger Corporation's December 31, 2018 year-end trial balance contained the following income statement items:  Required: Calculate the company's operating income for the year using a single-step income statement format.

Accepted Answer

The answer of The Filzinger Corporation's December 31, 2018 year-end...

Question 16

Excerpts from Hulkster Company's December 31, 2018 and 2017, financial statements are presented below: 
- Hulkster's 2018 profit margin is (rounded):

Accepted Answer

A)  17.1%. 
B)  13.5%. 
C)  7.6%. 
D)  4.5%.

Question 17

Material restructuring costs are reported as an element of income from continuing operations.

Accepted Answer

A) True 
 B)False

Question 18

In a statement of cash flows prepared under International Financial Reporting Standards (IFRS), interest paid is most often classified as a financing cash flow.

Accepted Answer

A) True 
 B)False

Question 19

Howard Co.'s 2018 income from continuing operations before income taxes was $280,000. Howard Co. reported before-tax income on discontinued operations of $50,000. All tax items are subject to a 40% tax rate. In its income statement for 2018, Howard Co. would show the following line-item amounts for income tax expense and net income:

Accepted Answer

A)  $112,000 and $198,000 respectively. 
B)  $92,000 and $230,000 respectively. 
C)  $132,000 and $330,000 respectively. 
D)  $79,000 and $198,000 respectively.

Question 20

Missoula Inc. reported the following selected financial statement data:

-Required: Compute the asset turnover ratio for 2018.

Accepted Answer

The answer of Missoula Inc. reported the following selected financial...

Exam 4: The Income Statement, Comprehensive Income, and the Statement of Cash Flows

Comprehensive income reports an expanded version of income to include certain types of gains and losses not included in traditional income statements.

The following information (in $ millions) comes from the Annual Report of Saratoga Springs Co. for the year ending 12/31/2018: Required: Compute the following amounts for Saratoga Springs Co. -Its return on assets for 2018. Round your answer to one decimal place, e.g., 0.1234 as 12.3%.

The Maytag Corporation's income statement includes income from continuing operations and a loss on discontinued operations. Earnings per share information would be provided for:

The following information (in $ millions) comes from the Annual Report of Saratoga Springs Co. for the year ending 12/31/2018: Required: Compute the following amounts for Saratoga Springs Co. -Its return on stockholders' equity for 2018. Round your answer to one decimal place, e.g., 0.1234 as 12.3%.

List at least four operating activities that would be reported in the statement of cash flows for Walmart. Assume the use of the direct method.

The decomposition of return on assets illustrates why some companies with low profit margins can be very profitable if their asset turnover is high.

Provincial Inc. reported the following before-tax income statement items: Provincial has a 30% income tax rate. Provincial would report the following amount of income tax expense as a separately stated line item in the income statement:

A company is effectively leveraging when:

Excerpts from Hulkster Company's December 31, 2018 and 2017, financial statements are presented below: -Hulkster's 2018 average collection period is:

A change in accounting principle that is implemented using the modified retrospective approach includes:

Excerpts from Hulkster Company's December 31, 2018 and 2017, financial statements are presented below: - Hulkster's 2018 receivables turnover is:

Changes in estimates are accounted for using the prospective approach.

The Filzinger Corporation's December 31, 2018 year-end trial balance contained the following income statement items: Required: Calculate the company's operating income for the year using a single-step income statement format.

Excerpts from Hulkster Company's December 31, 2018 and 2017, financial statements are presented below: - Hulkster's 2018 profit margin is (rounded) :

Material restructuring costs are reported as an element of income from continuing operations.

In a statement of cash flows prepared under International Financial Reporting Standards (IFRS), interest paid is most often classified as a financing cash flow.

Missoula Inc. reported the following selected financial statement data: -Required: Compute the asset turnover ratio for 2018.