only the portion of the loss attributable to inventory sold during the period is recorded in the financial statements. B. the market value figure for ending inventory is substituted for cost and the loss is buried in cost of goods sold C. a loss is recorded directly in the inventory account by crediting inventory and debiting loss on inventory decline. D. there is a direct reduction in the selling price of the product that results in a loss being recorded on the income statement prior to the sale. 15) Designated market value A. may sometimes exceed net realizable value. B. should always be equal to net realizable value less a normal profit margin.
Overstate net income. b. Understate net income. c. No effect on net income. d. Not sufficient information to determine effect on net income.
The most recent financial statements for Williamson, Inc., are shown here (assuming no income taxes): Income Statement Balance Sheet Sales $ 6,700 Assets $22,050 Debt $ 8,050 Costs 3,850 Equity 14,000 Net income $ 2,850 Total $22,050 Total $22,050 Assets and costs are proportional to sales. Debt and equity are not. No dividends are paid. Next year’s sales are projected to be $7,906. What is the external financing needed?
The excess of nonbusiness capital losses over nonbusiness capital gains must be added to taxable income to compute the net operating loss of an individual. ANS: T PTS: 1 REF: p. 7-21 49. An individual taxpayer who does not itemize deductions uses the standard deduction to compute the excess of nonbusiness deductions over the sum of nonbusiness income and net nonbusiness capital gains for purposes of computing net operating loss. ANS: T PTS: 1 REF: p. 7-22 50. When a net operating loss is carried back to a non-loss year, the net operating loss is a miscellaneous itemized deduction.
In fiscal year 2008, the return on invested capital of continuing operations was 9.5% compared to fiscal year 2007’s 13.9%. The decrease reflects the decrease in operating profit that also impacts the rationalization charges. If the rationalization charges are excluded the return on invested capital for continuing operations would have been 11.4% (Phillips, Libby, Libby, 2011). The cash flow statement shows the movement of cash within a company. The cash flow statement is split into three categories: operating activities, investing activities, and financing activities.
Options are derivative securities. II. The value of an option is dependent upon the value of the underlying security. III. The seller of the option retains the option premium whether or not the option is exercised.
1 1. If the beginning balance of retained earnings equals $12,000, the ending balance of retained earnings equals $15,000, and dividends for the year equal $1,000, then net income for the year equals: A. B. C. D. $3,000 $4,000 $2,000 $1,000 2. A company receives a $50,000 cash deposit from a customer on October 15 but will not provide services until November 20. Which of the following statements is true?
Each debenture can be converted into 25 shares of common stock at any time before 2019. What is the conversion value of the bond? Question 23 Warren Corporation’s stock sells for $42 per share. The company wants to sell some 20-year, annual interest, $1,000 par value bonds. Each bond would have 75 warrants attached to it, each exercisable into one share of stock at an exercise price of $47.
The p-value is 0.002 which is smaller than the significance level. Hence there are 0.002 chances that such a small value can observe when the null hypothesis is true. Since, this probability is smaller than the significance level we reject the null hypothesis at 5% level. Hence, we conclude that there is enough evidence to support the manager’s claim that the average annual income was less than $50,000. b.
Premier Investments Ltd dropped its current ratios sharply from 4.27 to 1.74. That indicates Premier Investments Ltd transferred its current assets to noncurrent assets or it got more current liabilities. However, it is still has less current liabilities covered it assets compared with David Jones Ltd. So David Jones Ltd needs to make a financial plan to meet the coming current liabilities, or they may get a financial crisis. Quick ratio Current ratio measures the current assets to be turned into cash to meet its debts in one year.