p20 - for the period would disclose these effects as a. a...

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Test Bank for Intermediate Accounting, Twelfth Edition 4 - 12 55. For Merando Company, the following information is available: Cost of goods sold $ 90,000 Dividend revenue 4,000 Income tax expense 9,000 Operating expenses 35,000 Sales 150,000 In Merando’s multiple-step income statement, gross profit a. should not be reported b. should be reported at $20,000. c. should be reported at $60,000. d. should be reported at $64,000. 56. Gross billings for merchandise sold by Otto Company to its customers last year amounted to $15,720,000; sales returns and allowances were $370,000, sales discounts were $175,000, and freight-out was $140,000. Net sales last year for Otto Company were a. $15,720,000. b. $15,350,000. c. $15,175,000. d. $15,035,000. 57. If plant assets of a manufacturing company are sold at a gain of $820,000 less related taxes of $250,000, and the gain is not considered unusual or infrequent, the income statement
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Unformatted text preview: for the period would disclose these effects as a. a gain of $820,000 and an increase in income tax expense of $250,000. b. operating income net of applicable taxes, $570,000. c. a prior period adjustment net of applicable taxes, $570,000. d. an extraordinary item net of applicable taxes, $570,000. 58. Sam Hurd Company has the following items: write-down of inventories, $120,000; loss on disposal of Sports Division, $185,000; and loss due to strike, $113,000. Ignoring income taxes, what total amount should Sam Hurd Company report as extraordinary losses? a. $ -0-. b. $185,000. c. $233,000. d. $298,000. 59. Fleming Company has the following items: write-down of inventories, $240,000; loss on disposal of Sports Division, $370,000; and loss due to an expropriation, $226,000. Ignoring income taxes, what total amount should Fleming Company report as extraordinary losses? a. $226,000 b. $370,000. c. $466,000. d. $596,000....
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This note was uploaded on 11/03/2011 for the course ACCT 3223 taught by Professor Peck during the Spring '11 term at Texas State.

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