18) For the year 2013, Foxmore Company reports the following items as part of their financial results:
Sales revenues from regular business operations
$3,000,000
Cost of goods sold
900,000
Operating expenses from their regular business operations
600,000
Gain on disposal of several items of property, plant & equipment
15,000
Income tax expense on continuing operations
330,000
Loss on the termination of a discontinued business segment, net of
tax
120,000
Losses on damage caused by earthquake, net of tax
280,000
How much is the “bottom line” net income (loss)?
A) $1,065,000
B) $1,500,000
C) $1,515,000
D) $785,000
19) At January 1, 2014, Foxmore Company had 80,000 shares of common stock outstanding and no preferred stock.
During the year, they issued 40,000 additional shares of common stock. At December 31, 2014, Foxmore had
120,000 shares of common stock outstanding, and no preferred stock. In addition, Foxmore reported the following
results for the year 2014:
Sales revenues from regular business operations
$3,000,000
Cost of goods sold
900,000
Operating expenses from their regular business operations
600,000
Gain on disposal of several items of property, plant & equipment
15,000
Income tax expense on continuing operations
330,000
Loss on the termination of a discontinued business segment, net of
tax
120,000
Losses on damage caused by earthquake, net of tax
280,000
At December 31, 2014, how much is the earnings per share for income (loss) from continuing operations?
(Please round all calculations to the nearest cent.)
A) $(1.20)
B) $7.85
C) $10.65
D) $11.85
20) At January 1, 2014, Foxmore Company had 80,000 shares of common stock outstanding and no preferred stock.
During the year, they issued 40,000 additional shares of common stock. At December 31, 2014, Foxmore had
120,000 shares of common stock outstanding, and no preferred stock. In addition, Foxmore reported the following
results for the year 2014:
Sales revenues from regular business operations
$3,000,000
Cost of goods sold
900,000
Operating expenses from their regular business operations
600,000
Gain on disposal of several items of property, plant & equipment
15,000
Income tax expense on continuing operations
330,000
Loss on the termination of a discontinued business segment, net of
tax
120,000
Losses on damage caused by earthquake, net of tax
280,000
At December 31, 2014, how much is the earnings per share for income (loss) from discontinued operations? (Please
round all calculations to the nearest cent.)
A) $(1.20)
B) $7.85
C) $10.65
D) $(2.80)
21) At January 1, 2014, Foxmore Company had 80,000 shares of common stock outstanding and no preferred stock.
During the year, they issued 40,000 additional shares of common stock. At December 31, 2014, Foxmore had
120,000 shares of common stock outstanding, and no preferred stock. In addition, Foxmore reported the following
results for the year 2014:
Sales revenues from regular business operations
$3,000,000
Cost of goods sold
900,000
Operating expenses from their regular business operations
600,000
Gain on disposal of several items of property, plant & equipment
15,000
Income tax expense on continuing operations
330,000
Loss on the termination of a discontinued business segment, net of
tax
120,000
Losses on damage caused by earthquake, net of tax
280,000
At December 31, 2014, how much is the earnings per share for income (loss) before extraordinary items?
(Please round all calculations to the nearest cent.)
A) $(1.20)
B) $7.85
C) $10.65
D) $(2.80)
22) At January 1, 2014, Foxmore Company had 80,000 shares of common stock outstanding and no preferred stock.
During the year, they issued 40,000 additional shares of common stock. At December 31, 2014, Foxmore had
120,000 shares of common stock outstanding, and no preferred stock. In addition, Foxmore reported the following
results for the year 2014:
Sales revenues from regular business operations
$3,000,000
Cost of goods sold
900,000
Operating expenses from their regular business operations
600,000
Gain on disposal of several items of property, plant & equipment
15,000
Income tax expense on continuing operations
330,000
Loss on the termination of a discontinued business segment, net of
tax
120,000
Losses on damage caused by earthquake, net of tax
280,000
At December 31, 2014, how much is the earnings per share for income (loss) for extraordinary items?
(Please round all calculations to the nearest cent.)
A) $(1.20)
B) $7.85
C) $10.65
D) $(2.80)
23) At January 1, 2014, Foxmore Company had 80,000 shares of common stock outstanding and no preferred stock.
During the year, they issued 40,000 additional shares of common stock. At December 31, 2014, Foxmore had
120,000 shares of common stock outstanding, and no preferred stock. In addition, Foxmore reported the following
results for the year 2014:
Sales revenues from regular business operations
$3,000,000
Cost of goods sold
900,000
Operating expenses from their regular business operations
600,000
Gain on disposal of several items of property, plant & equipment
15,000
Income tax expense on continuing operations
330,000
Loss on the termination of a discontinued business segment, net of
tax
120,000
Losses on damage caused by earthquake, net of tax
280,000
At December 31, 2014, how much is the earnings per share for total net income (loss)?
(Please round all calculations to the nearest cent.)
A) $(1.20)
B) $7.85
C) $10.65
D) $(2.80)
24) During the current year, a corporation has 2,000 shares of 10%, $50 par, cumulative preferred stock outstanding
and 6,000 shares of $10 par common stock outstanding. The company has net income of $53,000 and paid all
preferred dividends as usual. Compute earnings per share. Round all amounts to nearest cent.
A) $7.17
B) $8.83
C) $5.38
D) $6.63
25) What are the conditions that must be TRUE for an event to be considered extraordinary?
A) The event must be infrequent, but not unusual, to be considered extraordinary.
B) The event must be both infrequent and unusual to be considered extraordinary.
C) The event must be unusual, but not infrequent, to be considered extraordinary.
D) Infrequent and unusual are not requirements for an event to be considered extraordinary.
26) A corporation closes a facility and moves to a new location. How would a loss on the disposal of the equipment
at the closed facility be reported on an income statement?
A) As an operating expense in net income from continuing operations
B) As a component of discontinued operations
C) As an extraordinary loss
D) As another loss in net income from continuing operations
27) A corporation has net income of $365,000 for the current year. It paid its required preferred dividend of $17,500
and had no other stock transactions during the year. The average number of common shares outstanding during the
year was 69,500. What is the earnings per share?
A) $5.84
B) $5.00
C) $4.37
D) $1.00
28) Which of the following items is NOT included in comprehensive income?
A) Net income
B) Foreign-currency translation adjustments
C) Unrealized gains or losses on certain investments
D) Contingent liabilities
29) Which of the following items would NOT be shown on a combined statement of income and retained earnings?
A) Net income
B) Accumulated depreciation
C) Dividends paid
D) Retained earnings beginning balance
30) Which of the following statements is TRUE about prior period adjustments?
A) Prior period adjustments require a complete restatement of prior year financial reports.
B) Prior period adjustments are shown on the statement of retained earnings as corrections to the beginning balance.
C) Prior period adjustments affect balance sheet accounts only, and must be included on single-step income
statements.
D) Prior period adjustments must be included as a separate line item on a multi-step income statement.
31) Alexander Company reported the ending balance of Retained earnings as $400,000 on December 31, 2013.
During the first month of 2014, they discovered an error in the ledger which had the effect of overstating net income
in 2013 by $45,000. At the end of 2014, they included this item as a prior period adjustment. Year 2014 results
included $52,000 of net income and $15,000 of dividends paid. What amount would be shown as the ending
balance of Retained earnings on the December 31, 2014 financial statements?
A) $430,000
B) $347,000
C) $437,000
D) $392,000
32) Unrealized gains or losses on certain investments, foreign currency translation adjustments, gains and losses
from post-retirement benefit plans, and deferred gains and losses from derivatives are subject to specialized
accounting treatment. These items would normally be found on the:
A) statement of comprehensive income.
B) income statement, included with extraordinary items.
C) statement of net cash flow.
D) balance sheet under liabilities.
61
33) At January 1, 2013, Foxmore Company had 80,000 shares of common stock outstanding and no preferred stock.
During the year, they issued 40,000 additional shares of common stock. At December 31, 2013, Foxmore had
120,000 shares of common stock outstanding, and no preferred stock. In addition, Foxmore reported the following
results for the year 2013:
Sales revenues from regular business operations
$3,000,000
Cost of goods sold
900,000
Operating expenses from their regular business operations
600,000
Gain on disposal of several items of property, plant & equipment
15,000
Income tax expense on continuing operations
330,000
Loss on the termination of a discontinued business segment, net of
tax
120,000
Losses on damage caused by earthquake, net of tax
280,000
Please prepare a multi-step income statement from the above data. Do not include earnings per share information.
Foxmore Company
Income Statement
Year Ended December 31, 2013
34) At January 1, 2013, Foxmore Company had 80,000 shares of common stock outstanding and no preferred stock.
During the year they issued 40,000 additional shares of common stock. At December 31, 2013, Foxmore had
120,000 shares of common stock outstanding, and no preferred stock. In addition, Foxmore reported the following
results for the year 2013:
Sales revenues from regular business operations
$3,000,000
Cost of goods sold
900,000
Operating expenses from their regular business operations
600,000
Gain on disposal of several items of property, plant & equipment
15,000
Income tax expense on continuing operations
330,000
Loss on the termination of a discontinued business segment, net of
tax
120,000
Losses on damage caused by earthquake, net of tax
280,000
Please prepare earnings per share information in the following format. (Round all amounts to nearest cent.)
Earnings per share
Income (loss) from continuing operations
Income (loss) from discontinued operations
Income (loss) before extraordinary items
Extraordinary loss
Net income (loss)
Earnings per share
Income (loss) from continuing operations
Income (loss) from discontinued operations
Income (loss) before extraordinary items
Extraordinary loss
Net income (loss)