3 of 10 This test: 140 point(s) possible Submit 1 This question: 20 point(s) possible Assume that the Special Contract Division of Auto experienced the following transactions during the year ended December 31, 2020. (Click the icon to view the transactions.) Requirements 1. Prepare the Special Contracts Division income statement for the year ended December 31, 2020. 2. Identify the accounting concepts, assumptions, or principles used in accounting for the items described in a through f. State how you have applied the concept, assumption, or principle in preparing the Division's income statement. More info Requirement 1. Prepare the S Begin by completing the head Revenue: Total revenue Expenses a. Suppose the division provided copy services to a customer for the discounted price of $260,480. Under normal conditions, Auto would have provided these services for $296,000. Other revenues totalled $52,000. b. Salaries cost the division $21,000 to provide these services. The division had to pay employees overtime. Ordinarily, the salary cost for these services would have been $18,900. c. Other expenses totalled $243,000. Income tax expense was 28% of income before tax d. Auto has two operating divisions. Each division is accounted for separately to Indicate how well each is performing. At year-end, Auto combines the statements of divisions to show results for Auto as a whole. e. Inflation affects the amounts that Auto must pay for copy machines. To show the effects of inflation, net income would drop by $4,000. f If Auto were to go out of business, the sale of its assets would bring in $180,000 in cash. Total operating Net income (loss) Print Done MacBook Pro rentheses or a minus sign to indicate a net loss.) Time Remaining: 02:27:06 Next Assume that the Special Contract Division of Auto experienced the following transactions during the year ended December 31, 2020. Total operating expenses Net income (loss) Requirement 2. Identify the accounting concepts, assumptions, or principles used in accounting for the items described in a through f. State how you have applied the concept, assumption, or principle in preparing the Division's income statement. Identify the accounting assumption or characteristic that provides guidance in accounting for the item described. How have you applied the assumption or characteristics in preparing the special contracts division income statement? Begin with transaction a a. Report revenues at their the goods are worth is based on and to dispute b. C. d. Account for expenses Account for because value because that amount is supported by Each operating division of the company is for accounting purposes. e Accounting in Canada the effect of f. There is no evidence that Auto is so it seems potential sale value of Auto assets is not recorded. MacBook Pro data. What management believe with Auto as a whole Therefore, the Time Remaining: 02:26:47 Next Question 3 of 10 This test: 140 point(s) possible Submit s This question: 20 point(s) possible Assume that the Special Contract Division of Auto experienced the following transactions during the year ended December 31, 2020. (Click the icon to view the transactions.) Requirements 1. Prepare the Special Contracts Division income statement for the year ended December 31, 2020. 2. Identify the accounting concepts, assumptions, or principles used in accounting for the items described in a through f. State how you have applied the concept, assumption, or principle in preparing the Division's income statement. More info Requirement 1. Prepare the S Begin by completing the heade Revenue: Total revenue Expenses a. Suppose the division provided copy services to a customer for the discounted price of $260,480. Under normal conditions, Auto would have provided these services for $296,000. Other revenues totalled $52,000. b. Salaries cost the division $21,000 to provide these services. The division had to pay employees overtime. Ordinarily, the salary cost for these services would have been $18,900. c. Other expenses totalled $243,000. Income tax expense was 28% of income before tax d. Auto has two operating divisions. Each division is accounted for separately to Indicate how well each is performing. At year-end, Auto combines the statements of divisions to show results for Auto as a whole. e. Inflation affects the amounts that Auto must pay for copy machines. To show the effects of inflation, net income would drop by $4,000. f If Auto were to go out of business, the sale of its assets would bring in $180,000 in cash. Total operating Net income (loss) Print Done MacBook Pro X rentheses or a minus sign to indicate a net loss.) Time Remaining: 02:27:06 Next