1/ Misty Company reported the following before-tax items during the current year:

Sales revenue	$	630
Selling and administrative expenses		280
Restructuring charges		20
Loss on discontinued operations		50

Misty's effective tax rate is 30%. What is Misty's net income for the current year?

Multiple Choice

• $181.

• $196.

• $79.

• None of these answer choices are correct.

2/ Provincial Inc. reported the following before-tax income statement items:

Operating income	$	530,000
Loss on discontinued operations		95,000

Provincial has a 28% income tax rate. Provincial would report the following amount of income tax expense as a separately stated line item in the income statement:

Multiple Choice

• $26,600.

• $13,440.

• $148,400.

• $135,240.

3/ Hong Kong Clothiers reported revenue of $5,060,000 for its year ended December 31, 2018. Accounts receivable at December 31, 2017 and 2018, were $321,400 and $354,300, respectively. Using the direct method for reporting cash flows from operating activities, Hong Kong Clothiers would report cash collected from customers of:

Multiple Choice

• $5,060,000.

• $5,092,900.

• $5,027,100.

• $5,102,900

4/ Major Co. reported 2018 income of $301,000 from continuing operations before income taxes and a before-tax loss on discontinued operations of $73,000. All income is subject to a 38% tax rate. In the income statement for the year ended December 31, 2018, Major Co. would show the following line-item amounts for income tax expense and net income:

Multiple Choice

• $86,640 and $374,000 respectively.

• $114,380 and $228,000 respectively.

• $114,380 and $141,360 respectively.

• $86,640 and $186,620 respectively.

5/ Schneider Inc. had salaries payable of $61,200 and $90,600 at the end of 2017 and 2018, respectively. During 2018, Schneider recorded $620,400 in salaries expense in its income statement. Cash outflows for salaries in 2018 were:

Multiple Choice

• $529,800.

• $620,400.

• $591,000.

• $649,800.