Cirele the letter of the best answer. I6. Which of the following is true of accounting for changes in estimates A company recognizes a change in estimate by making a retrospective adjustment to the financial statements. b. e many accounts for changes in estimates only in the period of change it affects the future periods. c. Changes in estimates are not carried back to adjust prior years. Changes in estimates are considered as errors 17. Which of the following is a required disclosure in the income statement w reporting the disposal of a component of the business? gain or loss on disposal should be reported as an unusual gain or loss f operations of a discontinued component should be disclosed Ans. a The Results o b. immediately before income from continuing operations c. Earnings per share from continuing operations, discontinued operations, and net income should be disclosed on the face of the income statement. d. The gain or loss on disposal should not be segregated, but should be reported together with the results of continuing operations. 18. Gross billings for merchandise sold by Lang Company to its customers last year amounted to $12,720,000; sales returns and allowances were $370,000, sales discounts were $175,000, and freight-out was $140,000. Net sales last year for Lang ompany were Ans. a. $12,720,000. b. $12,350,000. c. $12,175,000. d. $12.035,000. 19. In 2017, Esther Corporation reported net income of $600,000. It declared and paid preferred stock dividends of $150,000 and common stock dividends of S60,000. During 2017, Esther had a weighted average of 300,000 common shares outstanding. Compute Esther's 2017 earnings per share. Ans. a. $1.30 b. $1.50 c. $2.00 d. $2.50 The amount of time that is expected to elapse until an asset is realized or otherwise converted into cash is referred to as 20. Ans. a. solvency b. financial flexibility. c. liquidity d. exchangeability