Exam 5: The Income Statement and the Statement of Cash Flows Time Value of Money Module

The income statement is an important financial statement for all of the following reasons, except

From the following information, compute cost of goods sold.

How does the statement of cash flows help external users assess the overall health of a company when used in conjunction with the other financial statements?

IFRS content in the income statement is similar to U.S. GAAP in all of the following areas except the disclosure of

On December 31, 2015, the net assets of Martinez Manufacturing amounted to $40,000. Net income calculated by using the financial capital maintenance concept amounted to $12,000. During the year, additional common stock was issued for $8,000, and $5,000 of dividends was paid. The net assets at January 1, 2015, amounted to

How should the gain or loss that is considered infrequent be disclosed?

The following accounts are taken from the accounting records of Dory Company at December 31, 2015 after adjustments: In addition, the following information is available: -The inventory on December 31, 2015, was $75,000. -Ten thousand shares of common stock were outstanding during the entire year. Dory paid dividends of $1.00 per share. -At the end of October, Dory sold its unprofitable restaurant component. From January through October, the component had incurred an operating loss pretax) of $14,000. The sale was made at a loss pretax) of $8,000. -The applicable tax rate is 30%. Required: Prepare a 2015 multiple-step income statement for the Dory Company.

Any disposal of a large number of long-lived assets can appropriately be reported in the income statement as results from discontinued operations.

Intraperiod tax allocation

Operating capability refers to

To compute earnings per share the denominator is net income attributable to common shareholders less any preferred stock dividends for the period.

In accrual accounting, net income is defined as

Bradley's Inc.'s adjusted trial balance contains the following account balances at December 31, 2016: Income taxes are 30% on all items, and there were 2,000 shares of common stock outstanding during the year. Required: Prepare a statement of comprehensive income.

The numerator in the earnings per share calculation is

Exhibit 5-1 The following condensed income statement of Ranger Corporation is presented for the two years ended December 31, 2016 and 2015: On January 1, 2016, Ranger entered into an agreement to sell one of its separate operating divisions for $2,000,000. The sale resulted in a gain on disposition of $900,000 on November 12, 2016, and qualifies as a discontinued component. This division's contribution to Ranger's reported income before income taxes for each year was as follows: 2016 $\quad$ $\quad$ $700,000 loss 2015 $\quad$ $\quad$ $400,000 loss Assume an income tax rate of 30%. -Refer to Exhibit 5-1. In the preparation of a revised comparative income statement, Ranger should report under the caption "Discontinued Operations" for 2016 and 2015, respectively,

Gains or losses associated with derivative financial instruments would be included in income from continuing operations.

In general, revenue is recognized

Exhibit 5-2 The following is an income statement from the financial records of Peace, Love and Joy Company for the year ended December 31, 2015: -Refer to Exhibit 5-2. Compute earnings-based interest coverage for Peace, Love, and Joy Company.

Exhibit 5-2 The following is an income statement from the financial records of Peace, Love and Joy Company for the year ended December 31, 2015: -Refer to Exhibit 5-2. Compute net profit margin for Peace, Love, and Joy Company.

Interperiod tax allocation involves apportioning a corporation's total income tax expense for a period to the various components of its net income and other comprehensive income items.