Exam 5: Statements of Net Income and Comprehensive Net Income

After a company has determined that a portion of a business is a component of an entity, evaluating whether the disposal of a component of an entity constitutes a discontinued operation includes ________.

What two alternatives does a company have for reporting its comprehensive income under U.S. GAAP and IFRS?

The Stockholders' Equity section of the 20X1 balance sheet for Beengo Enterprises is presented below: Beengo Enterprises Stockholders' Equity December 31, 20X1 Common Stock $12,000 Retained Earnings 56,800 Accumulated Other Comprehensive Income 3,700 Total Stockholders' Equity $72,500 For the year ended December 31, 20X2, the statement of comprehensive income reported $5,678 net income and $4,987 comprehensive income. During 20X2, Beengo paid $2,200 in dividends, issued $2,000 of no-par common stock, then repurchased $300 of its shares at the end of the reporting period. Prepare the statement of stockholders' equity for 20X2.

Which of the following would not be included in net income?

Sales minus cost of goods sold equals gross profit.

Which of the following is not typically included in the determination of income from continuing operations?

When a large number of line items limits the usefulness of the income statement, companies use a single-step income statement.

Which of the following items would not appear in the operating section of the multiple-step income statement of a manufacturer?

The noncontrolling interest line item on the income statement represents the income attributable to the portion of a subsidiary owned by others.

What is earnings per share and how is it reported in the financial statements?

Clowns-R-Us reported the following in the statement of comprehensive income for the year ended December 31: Income from continuing operations before tax \ 800,000 Income tax expense (300,000) Net income 500,000 Other comprehensive income 130,000 Comprehensive income 600,000 During the year, the company paid $103,000 in dividends and purchased treasury stock with a par value of $20,000 at a cost of $95,000. If the balance of Retained Earnings at the beginning of the year was $470,000, what is the balance of Retained Earnings at the end of the year?

Comprehensive income is comprised of only elements explicitly excluded from net income.

Earnings per share is presented for continuing operations, discontinued operations, and net income.

Which of the following is not an account type reported in the statement of stockholders' equity?

Each of the following is a motivation to engage in earnings management except ________.

Presented below are performance measure data from the income statement of Barton Company. Gross Profit $524,000 Operating Income 293,000 Income from Continuing Operations before Taxes 305,000 Income from Continuing Operations 232,000 Net Income 205,000 Barton has 100,000 shares of common stock outstanding. Prepare the summary schedule of earnings per share required by U.S. GAAP.

The following data include all the elements from Cambridge Company's income statement: Administrative Expense \ 872 Cost of Goods Sold 3,627 Gain on Sale of Securities 623 Income Tax Expense 1,234 Loss on Discontinued Operations 1,229 Loss on Disposal of Equipment 237 Revenue 8,766 Selling Expense 1,425 What is the amount of operating income for Cambridge Company?

Baggow Styles provided the following partial trial balance for the current year. Beginning with the line item Income from Operations, prepare a statement of net income for the year ended December 31. Baggow is subject to a 40% income tax rate. Baggow Styles Partial Trial Balance (Selected Accounts) For the Year Ended December 31 Accounts Debit Credit Income from Operations $567,000 Interest Income 12,870 Gain from Discontinued Operations 44,700 Gain on Sale of Land 19,560 Unrealized Gain on Available-for-Sale Debt Investments 41,920 Accumulated Depreciation on Assets from Discontinued Operations 23,630 Loss on Pension Adjustment $29,510 Loss on Disposal of Discontinued Operations 13,440 Amortization of Intangible Asset 19,280 Unrealized Loss on Trading Investments 62,050

Based on the selected financial information shown below, calculate the return on equity for year 2. Round to two decimal places. Year 1 Year 2 Total assets $1,200,000 $1,300,000 Total shareholders' equity $760,000 $800,000 Sales $5,000,000 $5,500,000 Net Income $200,000 $225,000

Gerogi Company had the following balances for income from continuing operations and pretax gains and losses on December 31: Income from continuing operations \ 227,000 Loss on discontinued operations (76,000) Unrealized gain on available-for-sale debt security 28,000 Loss on impairment of Goodwill (140,000) Foreign currency translation loss (66,000) The company's effective tax rate is 40%. What amount should Gerogi Company report as comprehensive income for the year ended December 31?