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Exam 4: The Income Statement, Comprehensive Income, and the Statement of Cash Flows

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Question 51

Multiple Choice

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On November 1, 2013, Jamison Inc. adopted a plan to discontinue its barge division, which qualifies as a separate component of the business according to GAAP regarding discontinued operations. The disposal of the division was expected to be concluded by April 30, 2014. On December 31, 2013, the company's year-end, the following information relative to the discontinued division was accumulated: In its income statement for the year ended December 31, 2013, Jamison would report a before-tax loss on discontinued operations of:

A) $65 million.
B) $50 million.
C) $130 million.
D) $145 million.

E) B) and C)
F) A) and D)

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Question 52

Multiple Choice

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What is Misty's income before extraordinary item(s) ?

A) $198.
B) $210.
C) $330.
D) $360.

E) All of the above
F) B) and C)

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Question 53

Multiple Choice

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The difference between single-step and multiple-step income statements is primarily an issue of:

Tropical Tours reported revenue of $400,000 for its year ended December 31, 2013. Accounts receivable at December 31, 2012 and 2013, were $35,000 and $32,000, respectively. Using the direct method for reporting cash flows from operating activities, Tropical Tours would report cash collected from customers of:

EPS disclosure is required only for income from continuing operations.

Provincial Inc. reported the following before-tax income statement items: Provincial has a 30% income tax rate. Provincial would report the following amount of income tax expense as a separate item in the income statement:

Required: Prepare a 2013 separate statement of comprehensive income for Rollins Inc.

Jacobsen Corporation prepares its financial statement applying International Financial Reporting Standards. During its 2013 fiscal year, the company reported before-tax income of $620,000. This amount does not include the following two items, both of which are considered to be material in amount: The company's income tax rate is 40%. In its 2013 income statement, Jacobsen would report income from continuing operations of:

Cal's Cookies reported 2013 before-tax income before extraordinary items of $152,000 and a before-tax extraordinary loss of $32,000. All tax items are subject to a 30% tax rate. In its 2013 income statement, Cal's reported the following amounts as separate line items for net income and income tax expense:

Comprehensive income reports an expanded version of income to include certain types of gains and losses not included in traditional income statements.

In the 2013 income statement for Foxtrot Co., it would report:

In the operating activities section of the statement of cash flows, we start with net income:

Schneider Inc. had salaries payable of $60,000 and $90,000 at the end of 2012 and 2013, respectively. During 2013, Schneider recorded $620,000 in salaries expense in its income statement. Cash outflows for salaries in 2013 were:

The distinction between operating and nonoperating income relates to:

Change statements include a:

Reconciliation between net income and comprehensive income would include:

List at least four operating activities that would be reported in the statement of cash flows for Walmart. Assume the use of the direct method.

Required: Prepare a multiple-step income statement with earnings per share disclosure.

Reporting comprehensive income can be accomplished by each of the following methods except:

Pro forma earnings: