Adjusted Trial Balance Paper
The Income Statement accounts (with normal account balances) from the Adjusted Trial Balance of MJM Co. at 12/31/08 is as follows:
Sales
1,500,000
Cost of Goods Sold
600,000
Selling Administrative Expense
300,000
Interest Revenue
180,000
Gain on the Sale of Equipment
270,000
Loss on the Sale of IBM Stock
300,000
Loss from Discontinued Division Operations
750,000
Gain on the Sale of the Discontinued Division
900,000
Extraordinary Gain from Tornado Insurance
1,050,000
Income Tax Expense (at 30% Rate)
585,000
What amount of gain appears for the Gain on Sale of Equipment on MJM's 2008 Income Statement?
Selected Answer: [None Given]
Answers:
$175,000
$81,000
$189,000
$108,000
None of these.
Response Feedback:
The actual gain of $270,000 would …show more content…
Response Feedback: Sales $ 1,500,000 Cost of Goods Sold - 600,000 Gross Profit $ 900,000 Selling Administrative Expense - 300,000 Interest Revenue 180,000 Gain on the Sale of Equipment 270,000 Loss on the Sale of IBM Stock - 300,000 Income from Continuing Ops before Tax $ 750,000 Income Tax Expense (at 30% Rate) - 225,00 Income from Continuing Operations $ 525,000
Question 9
0 out of 5 points
Which of the following material 2008 Financial Statement items is not reported in the Retained Earnings column of the Statement of Stockholders' Equity?
Selected Answer: [None Given]
Answers:
Gain on insurance received for destruction of vehicles from a hurricane in Philadelphia during …show more content…
Intraperiod tax allocation means that the income tax associated with certain irregular items, specifically Discontinue Operations (both the gain or loss on operations before discontinuance and separately, the gain or loss on sale of the Operation's assets) and Extraordinary Items (gain or loss on unusual and infrequent events) is allocated to those items on the IS, which are shown Net of Tax. These irregular items are shown last on the IS, above NI, but below the Income Tax Expense line, which represents the tax on all other items on the IS, comprising the bulk of the IS known as Income from Continuing Operations.
The reason for separating Income from Continuing Operations (with its Income Tax Expense Line) from Irregular Items (with each separate item shown net of tax) is that FS readers will know which types of revenues and expenses are probable on future IS's and which types are not probable.
Question
Sales
1,500,000
Cost of Goods Sold
600,000
Selling Administrative Expense
300,000
Interest Revenue
180,000
Gain on the Sale of Equipment
270,000
Loss on the Sale of IBM Stock
300,000
Loss from Discontinued Division Operations
750,000
Gain on the Sale of the Discontinued Division
900,000
Extraordinary Gain from Tornado Insurance
1,050,000
Income Tax Expense (at 30% Rate)
585,000
What amount of gain appears for the Gain on Sale of Equipment on MJM's 2008 Income Statement?
Selected Answer: [None Given]
Answers:
$175,000
$81,000
$189,000
$108,000
None of these.
Response Feedback:
The actual gain of $270,000 would …show more content…
Response Feedback: Sales $ 1,500,000 Cost of Goods Sold - 600,000 Gross Profit $ 900,000 Selling Administrative Expense - 300,000 Interest Revenue 180,000 Gain on the Sale of Equipment 270,000 Loss on the Sale of IBM Stock - 300,000 Income from Continuing Ops before Tax $ 750,000 Income Tax Expense (at 30% Rate) - 225,00 Income from Continuing Operations $ 525,000
Question 9
0 out of 5 points
Which of the following material 2008 Financial Statement items is not reported in the Retained Earnings column of the Statement of Stockholders' Equity?
Selected Answer: [None Given]
Answers:
Gain on insurance received for destruction of vehicles from a hurricane in Philadelphia during …show more content…
Intraperiod tax allocation means that the income tax associated with certain irregular items, specifically Discontinue Operations (both the gain or loss on operations before discontinuance and separately, the gain or loss on sale of the Operation's assets) and Extraordinary Items (gain or loss on unusual and infrequent events) is allocated to those items on the IS, which are shown Net of Tax. These irregular items are shown last on the IS, above NI, but below the Income Tax Expense line, which represents the tax on all other items on the IS, comprising the bulk of the IS known as Income from Continuing Operations.
The reason for separating Income from Continuing Operations (with its Income Tax Expense Line) from Irregular Items (with each separate item shown net of tax) is that FS readers will know which types of revenues and expenses are probable on future IS's and which types are not probable.
Question