Question Details

Company discontinues and disposes of a component segment


MULTIPLE CHOICE

	1.	Gross profit is the difference between:
a.	net income and operating income
b.	revenues and expenses
c.	sales and cost of goods sold
d.	income from continuing operations and discontinued operations
e.	gross sales and sales discounts



	2.	Which of the following would be included in operating income?
a.	interest income for a manufacturing firm
b.	rent income for a leasing subsidiary
c.	gain from sale of marketable securities for a retailer
d.	dividend income for a service firm
e.	none of the answers are correct




	3.	The following relate to Data Original in 2010. What is the ending inventory?

Purchases	$540,000
Beginning Inventory	80,000
Purchase Returns	10,000
Sales	800,000
Cost of Goods Sold	490,000

a.	$120,000
b.	$140,000
c.	$210,000
d.	$260,000
e.	none of the answers are correct



4.	Changes in account balances of Multi-Plus Inc. during 2010 were:

	Increase
Assets	$420,000
Liabilities	125,000
Capital Stock	100,000
Additional Paid-In Capital	140,000
Retained Earnings	?

Assuming that there were no charges to retained earnings other than dividends of $62,000, the net income for 2010 was:
a.	($7,000)
b.	$55,000
c.	$117,000
d.	$257,000
e.	none of the answers are correct




	5.	When a company discontinues and disposes of a component segment of its operations, the gain or loss from disposal should be reported as:
a.	an adjustment to retained earnings
b.	a sale of fixed assets in "other" expense
c.	an extraordinary item
d.	an accounting change
e.	a special item after continuing operations and before extraordinary items





Economics Assignment Help, Economics Homework help, Economics Study Help, Economics Course Help