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Question;36. Estimated gross profit rates may be used to;estimate a company's cost of goods sold and its ending inventory for;A. quarterly but not for annual financial statements.;B. both quarterly and annual financial statements.;C. neither quarterly nor annual financial statements.;D. annual but not for quarterly financial statements.;37. Davis Company uses LIFO for all of its inventories.;During its second quarter of 2009, Davis experienced a LIFO liquidation. Davis;fully expects to replace the liquidated inventory in the early part of the;third quarter. How should Davis report the inventory temporarily liquidated on;its income statement for the second quarter?;A. Cost of goods sold for the second quarter should include the;acquisition cost of the goods temporarily liquidated.;B. Cost of goods sold for the second quarter should include the expected;replacement cost of the goods temporarily liquidated.;C. Cost of goods sold for the second quarter should not include the;expected replacement cost of the goods temporarily liquidated.;D. Cost of goods sold for the second quarter is not affected by the;temporary liquidation of LIFO inventory.;38. How would a company report a change in an;accounting principle made on the last day of the third quarter?;A. Retrospective application to all pre-change interim periods reported.;B. No change is required.;C. Apply to current and prospective interim periods only.;D. Apply to prospective interim periods only.;39. Missoula Corporation disposed of one of its;segments in the second quarter and incurred a gain from disposal of;discontinued segment of $600,000, net of taxes. What is the effect of this gain;from disposal of discontinued segment?;A. Increase net income from operations for the year by $600,000.;B. Increase second quarter net income by $600,000.;C. Increase each quarter's net income by $150,000.;D. Increase each of the last three quarters' net income by $200,000.;40. Frahm Company incurred a first quarter operating;loss before income tax effect of $4,000,000. This is a normal occurrence for;Frahm because of seasonal fluctuations. Experience has demonstrated the income;earned during the remaining quarters far exceeds the first quarter losses each;year. Frahm estimates its annual income tax rate will be 30 percent. What net;loss should Frahm report for the first quarter?;A. $4,000,000;B. $2,800,000;C. $700,000;D. $0;41. The income tax expense applicable to the second;quarter's income statement is determined by;A. dividing the estimated annual income tax expense by four and allocating;the amount to the second quarter.;B. multiplying the effective income tax rate times the income before tax;for the second quarter.;C. subtracting the income tax expense applicable to the first quarter from;the income tax expense applicable to the first two quarters.;D. subtracting the income tax liability applicable to the first quarter;from the income tax liability applicable to the first two quarters.;42. Which of the following are established by FASB 131;as "enterprisewide disclosure" standards to provide more information;about the risks to a company?;I. Information about dominant industry segments.;II. Information about major customers.;III. Information about geographic areas;A. Both II and III;B. Both I and III;C. Both I and II;D. I, II, and II;43. FASB 131 uses a(n) ______ approach to the;definition of segments.;A. line of business;B. entity approach;C. portfolio;D. management;Essay Questions

 

Paper#45028 | Written in 18-Jul-2015

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