Exam 5: Income Statement and Related Information

At Hall Company, events and transactions during 2008 included the following. The tax rate for all items is 30%. (1) Depreciation for 2006 was found to be understated by $30,000. (2) A strike by the employees of a supplier resulted in a loss of $25,000. (3) The inventory at December 31, 2006 was overstated by $40,000. (4) A flood destroyed a building that had a book value of $500,000. Floods are very uncommon in that area. -The effect of these events and transactions on 2008 income from continuing operations net of tax would be

Joe Novak Corporation reports the following information: oe Novak should report retained earnings, 12/31/08, at

The occurrence that most likely would have no effect on 2008 net income (assuming that all amounts involved are material) is the

A manufacturer of computer hardware who sells all computer manufacturing facilities located in foreign countries can record the transaction as a disposal of a business component.

The FASB has specifically prohibited a net-of-tax treatment for gains and losses that are either unusual or nonrecurring but not both.

Simmons Corporation reports the following information: Simmons should report retained earnings, 1/1/08, as adjusted at

Hogan Corp.'s trial balance of income statement accounts for the year ended December 31, 2008 included the following: On Hogan's multiple-step income statement for 2008, -Extraordinary loss is

The accountant for Orion Sales Company is preparing the income statement for 2008 and the balance sheet at December 31, 2008. The January 1, 2008 merchandise inventory balance will appear

How should an unusual event not meeting the criteria for an extraordinary item be disclosed in the financial statements?

Adjustments that grow out of the use of estimates in accounting are not classified as prior period adjustments.