accounting - 1. When computing earnings per share on common...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
1. When computing earnings per share on common stock, dividends on cumulative, nonconvertible preferred stock should be: A. deducted from net income only if the dividends were declared or paid in the current period. B. deducted from net income regardless of the whether the dividends were not paid or declared in the period. C. deducted from net income only if net income is greater than the dividends. D. ignored. 2. Lexicon, Inc. bought a patent for $600,000 on January 2, 1997, at which time the patent had an estimated useful life of 10 years. On February 2, 2000, it was determined that the patent’s useful life would expire at the end of 2003. How much would Lexicon record as amortization expense for this patent for the year ending December 31, 2001? A. $140,000 B. $120,000 C. $105,000 D. $60,000 3. Millward Corporation’s books disclosed the following information for the year ended December 31, 2002: Net credit sales $1,500,000 Net cash sales 240,000 Accounts receivable at beginning of year 200,000 Accounts receivable at end of year 400,000 Millward’s accounts receivable turnover is A. 3.75 times B. 4.35 times C. 5.00 times D. 5.80 times 4. The EPS computation that is forward looking and based on assumptions about future transactions is: A. diluted EPS B. basic EPS C. continuing operations EPS D. extraordinary EPS 5. On December 31, 2002, Buckeye Corporation appropriately changed its inventory valuation method to FIFO cost from LIFO cost for both financial statement and income tax purposes. The change will result in a $140,000 increase in the beginning inventory at January 1, 2002. Assume a 30 percent income tax rate. The cumulative effect of this accounting change Buckeye should report for the year ended December 31, 2002, is: A. $0 B. $42,000
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
C. $98,000 D. $140,000 6. Kentucky Enterprises purchased a machine on January 2, 2002, at a cost of $120,000. An additional $50,000 was spent for installation, but this amount was charged erroneously to repairs expense. The machine has a useful life of five years and a savage value of $20,000. As a result of the error, A. retained earnings at December 31, 2003, were understated by $30,000 and 2003 income was overstated by $6,000 B. retained earnings at December 31, 2003, were understated by $38,000 and 2003 income was overstated by $6,000 C. retained earnings at December 31, 2003, were understated by $30,000 and 2003 income was overstated by $10,000
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/06/2010 for the course ACC int taught by Professor Bhute during the Spring '08 term at The School of the Art Institute of Chicago.

Page1 / 5

accounting - 1. When computing earnings per share on common...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online