2. Earnings per share disclosure is required only for income from continuing operations.

True or False

3. Comprehensive income is the total change in shareholders' equity that occurred during the period.

True or False

4.

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

Operating income	$500,000
Loss on discontinued operations	97,000

Provincial has a 34% income tax rate.

Provincial would report the following amount of income tax expense as a line item in the income statement: a. )$19,720. b.) $170,000. c.) $156,740. d.) $32,980. 5.

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On August 1, 2016, Rocket Retailers adopted a plan to discontinue its catalog sales division, which qualifies as a separate component of the business according to GAAP regarding discontinued operations. The disposal of the division was expected to be concluded by June 30, 2017. On January 31, 2017, Rocket's fiscal year-end, the following information relative to the discontinued division was accumulated:

Operating loss February 1, 2016 Jan. 31, 2017	$116,000
Estimated operating losses, Feb. 1 June 30, 2017	71,000
Impairment of division assets at Jan. 31, 2017	28,000

In its income statement for the year ended January 31, 2017, Rocket would report a before-tax loss on discontinued operations of:

a.) $116,000.

b.) $144,000.

c.) $43,000.

d.) $187,000.

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6.

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On November 1, 2016, Jamison Inc. adopted a plan to discontinue its barge division, which qualifies as a separate component of the business according to GAAP regarding discontinued operations. The disposal of the division was expected to be concluded by April 30, 2017. On December 31, 2016, the company's year-end, the following information relative to the discontinued division was accumulated:

Operating loss Jan. 1 Dec. 31, 2016	$82 million
Estimated operating losses, Jan. 1 to April 30, 2017	98 million
Excess of fair value, less costs to sell, over book value at Dec. 31, 2016	23 million

In its income statement for the year ended December 31, 2016, Jamison would report a before-tax loss on discontinued operations of: a.) $59 million. b.) $82 million. c.) $180 million. d.) $157 million.

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7.

Schneider Inc. had salaries payable of $61,000 and $90,700 at the end of 2015 and 2016, respectively. During 2016, Schneider recorded $620,500 in salaries expense in its income statement. Cash outflows for salaries in 2016 were:

a.) $590,800.

b.) $620,500.

c.) $529,800.

d.) $650,200.

8.

Tropical Tours reported revenue of $410,000 for its year ended December 31, 2016. Accounts receivable at December 31, 2015 and 2016, were $35,200 and $30,300, respectively. Using the direct method for reporting cash flows from operating activities, Tropical Tours would report cash collected from customers of:

a.) $414,900.

b.) $410,000.

c.) $445,200.

d.) $405,100.

9. Freda's Florist reported the following before-tax income statement items for the year ended December 31, 2016:

Operating income	$250,000
Income on discontinued operations	$70,000

All income statement items are subject to a 40% income tax rate. In its 2016 income statement, Freda's separately stated income tax expense and total income tax expense would be:

a.) $128,000 and $128,000, respectively.

b.) $128,000 and $100,000, respectively.

c.) $100,000 and $128,000, respectively.

d.) $100,000 and $100,000, respectively.

10. On May 1, Foxtrot Co. agreed to sell the assets of its Footwear Division to Albanese Inc. for $80 million. The sale was completed on December 31, 2016.

The following additional facts pertain to the transaction: The Footwear Division qualifies as a component of the entity according to GAAP regarding discontinued operations. The book value of Footwear's assets totaled $48 million on the date of the sale. Footwear's operating income was a pre-tax loss of $10 million in 2016. Foxtrot's income tax rate is 40%. Suppose that the Footwear Division's assets had not been sold by December 31, 2016, but were considered held for sale. Assume that the fair value of these assets at December 31 was $80 million. In the 2016 income statement for Foxtrot Co., under discontinued operations it would report a:

a.) $6 million loss.

b.) $10 million loss.

c.) $13.2 million income.

d.) None of the other answers is correct.