51) The Callie Company has provided the following information:
Operating expenses were $231,000;
Cost of goods sold was $376,000;
Net sales were $940,000;
Interest expense was $32,000;
Gain on sale of investments was $76,000;
Income tax expense was $151,000.
What was Callie’s income from operations (operating income)?
A) $188,000.
B) $333,000.
C) $156,000.
D) $232,000.
52) The Callie Company has provided the following information:
Operating expenses were $231,000;
Cost of goods sold was $376,000;
Net sales were $940,000;
Interest expense was $32,000;
Gain on sale of a building was $76,000;
Income tax expense was $151,000.
What was Callie’s income before taxes?
A) $564,000.
B) $188,000.
C) $377,000.
D) $232,000.
53) Kryton Corp. has provided the following information:
Gross profit was $620,000;
Cost of goods sold was $380,000;
Net income was $400,000.
What was Kryton’s gross profit percentage?
A) 40%
B) 61.3%
C) 62%
D) 155%
54) Brimmel Corp. has provided the following information:
Sales were $780,000;
Cost of goods sold was $429,000;
Net income was $195,000.
What was Brimmel’s gross profit percentage?
A) 55%
B) 45%
C) 62%
D) 222%
55) Which of the following is not reported as an operating expense on the income statement?
A) Administrative expenses.
B) Research and development expense.
C) Interest expense.
D) Selling expenses.
56) The Nellie Company has provided the following information:
Operating expenses were $115,000;
Gross profit was $629,000;
Cost of goods sold was $470,000;
Interest expense was $17,000;
Income tax expense was $199,000.
What was Nellie’s operating income?
A) $514,000.
B) $612,000.
C) $497,000.
D) $298,000.
57) The Nellie Company has provided the following information:
Operating expenses were $115,000;
Gross profit was $629,000;
Cost of goods sold was $470,000;
Interest expense was $17,000;
Income tax expense was $199,000.
What was Nellie’s income before taxes?
A) $514,000.
B) $612,000.
C) $497,000.
D) $298,000.
58) The Willie Company has provided the following information:
Operating expenses were $345,000;
Income from operations was $415,000;
Net sales were $1,100,000;
Interest expense was $71,000;
Loss from sale of investments was $87,000;
Income tax expense was $58,000.
What was Willie’s gross profit?
A) $340,000.
B) $689,000.
C) $818,000.
D) $760,000.
59) The Willie Company has provided the following information:
Operating expenses were $345,000;
Income from operations was $415,000;
Net sales were $1,100,000;
Interest expense was $71,000;
Loss from sale of investments was $87,000;
Income tax expense was $58,000.
What was Willie’s income before taxes?
A) $344,000.
B) $199,000.
C) $257,000.
D) $286,000.
60) The Willie Company has provided the following information:
Operating expenses were $345,000;
Income from operations was $415,000;
Net sales were $1,100,000;
Interest expense was $71,000;
Loss from sale of investments was $87,000;
Income tax expense was $58,000.
What was Willie’s nonoperating income (expense)?
A) ($71,000).
B) ($158,000).
C) $216,000.
D) $257,000.
61) The Willie Company has provided the following information:
Operating expenses were $345,000;
Income from operations was $415,000;
Net sales were $1,100,000;
Interest expense was $71,000;
Loss from sale of investments was $87,000;
Income tax expense was $58,000.
What was Willie’s net income?
A) $373,000.
B) $328,000.
C) $199,000.
D) ($156,000).
62) Which of the following would not be used to calculate income from operations?
A) Gross profit.
B) Selling and administrative expenses.
C) Interest income.
D) Research and development expense.
63) Which of the following statements regarding earnings per share is false?
A) It is reported on the income statement.
B) It increases when net income increases.
C) It is calculated using the average number of common shares outstanding during the period.
D) It would not be affected by additional shares of common stock issued during the year.
64) Which of the following would not typically be disclosed in the notes to the financial
statements?
A) Additional detail regarding numbers reported in the financial statements.
B) A summary of significant accounting policies.
C) Commitments under long-term supply agreements.
D) The net income earned for the reporting period.
65) Examples of nonoperating items that would appear on an income statement are:
A) Interest income, depreciation expense, gain on sale of land.
B) Cost of sales, interest expense, loss on sale of investments.
C) Interest expense, interest income, loss on sale of investments.
D) Depreciation expense, interest income, interest expense.
66) In which of the following classifications would cash dividend payments to stockholders be
reported in the statement of cash flows?
A) Operating activities.
B) Financing activities.
C) Investing activities.
D) Stockholder activities.
67) Which of the following items is not part of disclosure notes to the financial statements?
A) Descriptions of the significant accounting methods applied in the company’s financial
statements.
B) Additional detail of income taxes payable reported in the balance sheet.
C) Names of executive officers and the salaries for each officer listed.
D) Commitments under long-term supply agreements to buy inventory and equipment.
68) Anjou Company had 10,000 shares of common stock outstanding at December 31, 2018 and
14,000 shares of common stock outstanding at December 31, 2019. Anjou had sales of
$3,600,000 in 2019 and net income of $280,000 in 2019. What is the earnings per share amount
reported for Anjou in 2019?
A) $7.78
B) $9.36
C) $20.00
D) $23.33
69) What additional information is required to be presented on the same page as the income
statement?
A) Cash paid for interest.
B) Deferred revenues.
C) Earnings per share.
D) Profit margin.
70) When shares of the reporting company’s common stock are issued in exchange for cash,
where is this reported on a statement of cash flows?
A) Operating activities.
B) Financing activities.
C) Investing activities.
D) Stockholder activities.
71) In what order are cash flow activities presented on the statement of cash flows?
A) Investing activities, Operating activities, Financing activities.
B) Financing activities, Operating activities, Investing activities.
C) Operating activities, Investing activities, Financing activities.
D) Operating activities, Financing activities, Investing activities.
72) A company has paid cash to repurchase its common stock that was previously issued. Where
will this cash flow be reported on the statement of cash flows?
A) Operating activities.
B) Financing activities.
C) Investing activities.
D) Stockholder activities.
73) Which of the following statements is false when a company sells inventory costing $700 for
$1,200 cash and operating expenses are $200?
A) Cost of goods sold is $700.
B) Gross profit is $500.
C) Stockholders’ equity increases by net income of $300.
D) Net sales increase $500.
74) Which of the following statements is false when a company sells inventory costing $900 for
$1,500 cash?
A) Current assets increase $600.
B) Gross profit increases $1,500.
C) Stockholders’ equity increases $600.
D) Net sales increases $1,500.
75) Which one of the following statements is true when a company sells inventory costing $800
for $1,400 cash, and operating expenses are $500?
A) There is no change in current assets.
B) Stockholders’ equity increases $100.
C) Gross profit increases $100.
D) Net sales increases $2,200.
76) Huron has provided the following year-end balances:
Cash, $25,000
Patents, $7,900
Accounts receivable, $9,300
Property, plant, and equipment, $98,700
Prepaid insurance, $3,600
Accumulated depreciation, $10,000
Inventory, $37,000
Retained earnings, 15,500
Trademarks, $12,600
Accounts payable, $8,000
Goodwill, $11,000
How much are Huron’s current assets?
A) $85,900.
B) $71,300.
C) $74,900.
D) $102,100.
77) Huron has provided the following year-end balances:
Cash, $25,000
Patents, $7,900
Accounts receivable, $9,300
Property, plant, and equipment, $98,700
Prepaid insurance, $3,600
Accumulated depreciation, $10,000
Inventory, $37,000
Retained earnings, 15,500
Trademarks, $12,600
Accounts payable, $8,000
Goodwill, $11,000
How much are Huron’s net noncurrent assets?
A) $122,300.
B) $120,200.
C) $123,800.
D) $112,300.
78) Huron has provided the following year-end balances:
Cash, $25,000
Patents, $7,900
Accounts receivable, $9,300
Property, plant, and equipment, $98,700
Prepaid insurance, $3,600
Accumulated depreciation, $10,000
Inventory, $37,000
Retained earnings, $15,500
Trademarks, $12,600
Accounts payable, $8,000
Goodwill, $11,000
How much is Huron’s stockholders’ equity?
A) $33,800.
B) $187,100.
C) $195,100.
D) $202,600.