nalyze the following: I – When a component of an entity was discontinued during the year, the component's operating loss of the current period should be included in income statement as part of revenue and expenses. II – If the fair value less cost of disposal is lower than the carrying amount of a non-current asset classified as held for sale, the difference is accounted for as an impairment loss. III – The effect of recording a 100% share dividend would be to leave working capital unaffected, decrease earnings per share and increase book value per share. Given these, we can conclude that: Group of answer choices Only statement II is false. Only statements I and III are true. Only statements I and II are true. Statement III is false.

nalyze the following: I – When a component of an entity was discontinued during the year, the component's operating loss of the current period should be included in income statement as part of revenue and expenses. II – If the fair value less cost of disposal is lower than the carrying amount of a non-current asset classified as held for sale, the difference is accounted for as an impairment loss. III – The effect of recording a 100% share dividend would be to leave working capital unaffected, decrease earnings per share and increase book value per share. Given these, we can conclude that: Group of answer choices Only statement II is false. Only statements I and III are true. Only statements I and II are true. Statement III is false.

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter6: Accounting Quality

Section: Chapter Questions

Problem 2IC

See similar textbooks

Similar questions

Gem Company classifies a portion of its retained earnings as appropriated for loss contingencies. Consequently, the company Group of answer choices A.) May transfer to income a part of said retained earnings so appropriated. B.)Should not identify said appropriation as an appropriation of retained earnings. C.) Should show the said appropriation of retained earnings within the stockholders' equity section of the balance sheet D.)Could charge costs or losses to the said appropriated retained earnings.
30. As a minimum, the face of the income statement shall include line items that present the following amounts for the period: I. revenue II. finance costs III. share of the profit or loss of associates and joint ventures accounted for using the equity method IV. tax expense V. a single amount comprising the total of (i) the post-tax profit or loss of discontinued operations and (ii) the post-tax gain or loss recognized on the measurement to fair value less costs to sell or on the disposal of the assets or disposal group(s) constituting the discontinued operation VI. a single amount comprising the total of the post-tax profit or loss on early extinguishment of long-term financial debts VII. profit or loss a. I, II, III, IV, V, VII b. I, II, V, VII c. I, II, III, IV, V, VI, VII d. I, II, III, IV, V, VII
5. S1: For the results of a component of an entity to be classified as discontinued operation, management must have entered in a sale agreement.S2: The net income or net loss from discontinued operation, net of tax shall be shown as a single amount in the income statement after income from continuing operations and before net income. * A. Both statements are true O B. Both statements are false O c. Only statement 1 is true O D. Only statement 2 is true 6. The fuel and oil as a major line of business of San Miguel Enterprises becomes available for immediate sale in its present condition. The termination costs of employees resulting from the discontinuance should be * O A. Included in the computation of other comprehensive income B. Shown as other expense O c. Shown as a prior period adjustment D. Netted against the income from operations of the component as part of discontinued operation E. None of them
P Ltd bought 80% of S Ltd’s equity shares on 1 January 2016. On the date of the purchase of S Ltd's shares, among other things, S Ltd's statement of financial position contains the following: $ Retained profit 72,000 Tangible non-current assets Cost 288,000 Fair value 360,000 On the date of acquisition (of S Ltd's shares) by P Ltd, S Ltd's assets were not revalued to fair value. It is part of S Ltd's accounting policy to depreciate non-current assets on a straight-line basis for 10 years. The income statements of P Ltd and S Ltd for the year ended 31 December 2020 are as follows: P Ltd S Ltd $ $ Revenue 240,000 168,000 Cost of sales 144,000 24,000 Gross profit 96,000 144,000 Expenses 12,000 14,400 Depreciation and amortization Operating profit 24,000 28,800 60,000 100,800 9,600 50,400 Income tax 2,400 Net profit 98,400 Reserves (brought forward) Reserves (carried forward) 240,000 168,000 290,400 266,400 Note: P Ltd and S Ltd are considered to be in the same group for the purpose of…
Discuss the appropriate treatment in the income statement for the following items: a. Loss on discontinued operations. b. Noncontrolling interest allocation. c. Earnings per share. d. Gain on sale of equipment.
Which of the following items has no effect on the Accumulated Adjustments Account (AAA) of an S Corporation? O Short-Term Capital Loss. O Additional stock purchases by a sharehoklder of the S Corporation. O Cost Of Goods Sold. O Administrative Expenses.
6. Statement 1: Unrealized gains or losses from financial assets measured at fair value through OCI are closed to Retained Earnings at the end of the accounting period. Statement 2: If a company’s business model for debt investment is achieved by collecting contractual cash flows and by selling the financial asset, such investment should be designated as a financial asset measured at amortized cost. a. Only statement 1 is true b. Only statement 2 is true c. Both statements are true d. Both statements are false
1. Directly attributable costs include:I. Interest Expense when the asset is ready for useII. Value-added taxes, the entity is not VAT-registered a. I onlyb. II onlyc. Both I and IId. Neither I nor II2. Computation of maximum dividend of wasting asset corporations include the following, except: I. Appropriated retained earningsII. Realized portion of accumulated depletiona. I onlyb. II onlyc. I and IId. None from I and IIPLEASE ADD REFERENCE FOR ANSWERPS: NOT SATISFIED WITH THE ANSWER OF LAST TUTOR
1. Directly attributable costs include:I. Interest Expense when the asset is ready for useII. Value-added taxes, the entity is not VAT-registered a. I onlyb. II onlyc. Both I and IId. Neither I nor II2. Computation of maximum dividend of wasting asset corporations include the following, except: I. Appropriated retained earningsII. Realized portion of accumulated depletiona. I onlyb. II onlyc. I and IId. None from I and II PLEASE ANSWER ITH REFERENCE
38. The current asset section of a balance sheet most likely will include: a. goodwill arising in a business combination accounted for as acquisition b. all deferred income taxes resulting from interperiod income tax allocation c. rent receivable for a security deposit on a lease d. a receivable from a customer not collectible for over one year
Which of the following statements is true regarding share appreciation rights (SAR) payable in cash? Multiple Choice Any change in estimated total compensation is recorded as a prior adjustment. The total amount of compensation is not known for certain until the date the SAR is exercised. The liability is adjusted to reflect each additional year of service. None of these answer choices are correct.
How would a property dividend declared before end of reporting period and to be distributed in the next accounting period affect the retained earnings balance on the date of declaration, end of reporting period and date of payment? Retained earnings balance is only decreased on the date of declaration equivalent to the fair value of the non-cash asset to be distributed and no change at the end of reporting period and date of payment. Retained earnings balance is decreased at the date of declaration equal to the fair value of the non-cash asset and any changes in the fair value of the non- cash asset is reflected also to the retained earnings balance at the end of reporting period and on the date of payment. Retained earnings balance is only increased on the date of declaration equivalent to the fair value of the non-cash asset to be distributed and no change at the end of reporting period and date of payment. Retained earnings balance is decreased at the date of…