Intermediate Accounting Ch 4 – Flashcards

Misty Company reported the following before-tax items during the current year: Sales-$600, Operating Exp-250, Restructuring charges-20, Extraordinary loss-50.Misty's effective tax rate is 40%. What is misty's income before extraordinary items

Misty Company reported the following before-tax items during the current year: Sales-$600, Operating Exp-250, Restructuring charges-20, Extraordinary loss-50.Misty's effective tax rate is 40%. What is Misty's net income for the current year?

The Maytag Corporation's income statement includes income from continuing operations, a loss from discontinued operations, and extraordinary items. Earnings per share information would be provided for:

Change statements include a:

The FASB's stated preference for reporting operating cash flows is the:

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:

Shady Lane's income tax payable account decreased from $14 million to $12 million during 2013. If its income tax expense was $80 million, what was shown as an operating cash flow under the direct method?

Bird Brain Co. reported net income of $45,000 for the year ended December 31, 2013. January 1 balances in accounts receivable and accounts payable were $23,000 and $26,000 respectively. Year-end balances in these accounts were $22,000 and $28,000, respectively. Assuming that all relevant information has been presented, Bird Brain's cash flows from operating activities would be:

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:*Unusual and infrequent gain $200,000 Loss from discontinued operations (300,000)* The company's income tax rate is 40%. In its 2013 income statement, Jacobsen would report income from continuing operations of:

Hong Kong Clothiers reported revenue of $5,000,000 for its year ended December 31, 2013. Accounts receivable at December 31, 2012 and 2013, were $320,000 and $355,000, respectively. Using the direct method for reporting cash flows from operating activities, Hong Kong Clothiers would report cash collected from customers of:

Reporting comprehensive income according to International Financial Reporting Standards can be accomplished by each of the following methods except:

Comprehensive income is the change in equity from:

Reconciliation between net income and comprehensive income would include:

When a company changes from the straight-line method of deprecation for previously recorded assets to the double-declining balance method, which of the following should be used?

What are the components of income from continuing operations?

What are revenues?

What are expenses?

What are gains? Losses?

What is income tax expense and how is it reported?

What is operating income

What is nonoperating income?

Income statement that first lists all the revenues and gains included in income, then expenses and losses are grouped subtotaled and subtracted from revenues and gains to obtain income from continuing operations. Income tax expense is usually listed last.

This format reports a series of intermediate subtotals such as gross profit, operating income, and income before taxes.

Refers to the ability of reported earnings to predict a company's future earnings

Transitory Earnings Effects

What are the two major ways to manipulate income?

How to solve for EPS

An expanded version of income that includes four types of gains and losses that traditionally have not been included in income statements

What are the four types of gains and losses not recognized in comprehensive income?

Accounting standards bible

Costs associated with shutdown or relocation of facilities or downsizing of operations are recognized in the period incurred

The carrying value (book value) of the assets of the component is more than fair value minus cost to sell

Items that are reported separately, with taxes associated are...

Income tax expense must be associated with each component of income that causes it, so, what do you have to show income tax expense for?

A "component" that either has been disposed of or is classified as held for sale, and represents one of the following: A separate major line of business or major geographical area of operations, part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations, or a business that meets the criteria to be classified as held for sale on acquisition

Income or loss from operations of the component from the beginning of the reporting period to the disposal date

Income or loss from operations of the component from the beginning of the reporting period to the end of the reporting period

A material event or transaction that is both unusual in nature and infrequent in occurence

Items that are material and are either unusual or infrequent - but not both- are included as what?

Change from one GAAP method to another GAAP Method

Revision of an estimate because of new information or new experience

Preparation of financial statements for an accounting entity other than the entity that existed in the previous period

When an error is discovered in the same year, what is done?

When material errors are discovered in subsequent year, what is done?

Reflects the potential dilution that could occur for companies that have certain securities outstanding that are convertible into common shares or stock options that could create additional common shares if the options were exercised.

EPS is reported separately for what?

Reports the cash effects of each operating activity

Starts with accrual net income and converts to cash basis