Exam 5: Statements of Net Income and Comprehensive Net Income

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

Which statement is true about the computation of net income and comprehensive income?

Truko, Inc. provided the following partial trial balance for the current year. Prepare a single-step income statement for the year ended December 31. Truko is subject to a 40% income tax rate. Truko Inc. Partial Trial Balance (Selected Accounts) For the Year Ended December 31 Accounts Debit Credit Dividends \ 2,460 Sales \ 225,400 Dividend Income 3,830 Interest Income 1,450 Gain on Disposal of Plant Assets 14,810 Unrealized Gain on Trading Investments 7,270 Cost of Goods Sold 90,100 Office Supplies Expense 4,500 Sales Salaries Expense 8,390 Selling Expenses 11,210 Accounting and Legal Fees - General Expense 2,400 Advertising Expense 6,660 Office Salaries Expense 21,480 Depreciation Expense-General Expense 18,600 Interest Expense 2,570 Loss on Asset Impairment 1,840

Companies presenting comprehensive income in two statements will include the statement of comprehensive income in the notes somewhere after the statement of net income.

On the income statement, the line item that comes before income tax expense is called income from continuing operations.

The following data include all the elements from Cambridge Company's income statement: Administrative Expense \ 872 Cost of Goods Sold 3,604 Gain on Sale of Securities 623 Income Tax Expense 1,234 Loss on Discontinued Operations 1,229 Loss on Disposal of Equipment 237 Revenue 8,741 Selling Expense 1,425 What is the amount of gross profit for Cambridge Company?

Which of the following income statement items is considered to be transitory?

Which of the following is an advantage of the two-statement approach to reporting other comprehensive income (OCI)?

List the five component accounts included in stockholders' equity.

Which of the following is not part of the U.S. GAAP definition of a component of an entity under discontinued operations?

Why are the results from discontinued operations separated from the results from continuing operations on an income statement?

The "cookie jar reserves" earnings management technique involves ________.

Which of the following is the key performance measure reported on the income statement that is typically presented last in sequence?

Which of the following criteria for determining a discontinued operation is the same for IFRS as for U.S. GAAP?

Key performance measures on the statement of net income include operating income and income from continuing operations, among others.

Based on the selected financial information shown below, calculate the profit margin 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

On May 1, Jonson Industries decided to discontinue its prepackaged business segment. At the end of the year, the company is still holding the business segment for disposal, which is expected early in the following year. On its year-end income statement, Jonson Industries will report as income from discontinued operations the profits generated by the prepackaged business segment ________.

Morton Company has the following transactions in the current year. Assuming that all of the transactions are material, which of them will most likely have no effect on current year net income?

Which section of the multi-step income statement reports revenues and expenses related to secondary operations of the entity?

Which of the following statements about earnings quality is false?