Homework 1. Jackson, Inc. has the following information is available: Cost of goods sold S148,500 Dividend revenue 3.750 Income tax expense 3,000 Operating expenses 79,500 Sales 255,000 In Jackson's multiple-step income statement, gross profit a. will not be reported b. will be reported at $24,000. c. will be reported at $27.000 d. will be reported at 1 at $104,500 2. How should gains and losses be reported in the financial statements? a. Shown as a separate item after income from operations before income taxes, if material, and supplemented by a footnote if deemed appropriate, b. Shown in operating revenues or expenses if material with disclosure c. Shown net of income tax after ordinary net earnings, but before discontinued operations d. Shown net of income tax after discontinued operations but before net camings 3. Companies are required to highlight certain items in the financial statements so that users can better determine the long-run earning power of the company. Which of the following is not one of those items? a. Unusual gains and losses h. Noncontrolling interest c. Changes in accounting principle d. Discontinued operations 4. Barger Enterprises has an unusual loss of $300,000, an infrequent gain of S700,000, and a tax rate of 30%. At what amount should Barger report each item? Unusual Loss Unusual Gain 1. S(300,000) $700,000 2. (300,000) 490,000 3. (210,000) 700,000 4. (210,000) 490,000 a ! b. 2 c.3 d. 4 5. The occurrence which most likely would have no effect on 2022 net income (assuming that all amounts involved are material) is the a. sale in 2022 of an office building contributed by a shareholder in 2016. b. collection in 2022 of a receivable from a customer whose account was written off in 2021 by a charge to the allowance account. c. settlement based on litigation in 2022 of previously unrecognized damages from a serious accident which occurred in 2021. d. worthlessness determined in 2022 of shares purchased on a speculative basis in 2022 6. Clair, Inc. reports net income of $700.000. It declares and pays dividends of $100,000 for the year, one-half of which relate to the preferred shares. The weighted average number of ordinary shares outstanding during the year is 200,000 shares, and the weighted average number of preferred shares outstanding during the year is 10,000 shares. Rounded to the nearest cent, earnings per share for Clair, Inc. is a. $3.18. b. $3.25 c. S3.00. d. $2.95 7. Earnings per share is computed as net income a divided by the weighted average of ordinary shares outstanding. b. minus preferred dividends divided by the weighted average of ordinary shares outstanding. c. divided by the ending ordinary shares outstanding. d. minus preferred dividends divided by the ending ordinary shares outstanding 8. Prior period adjustments are reported as an a unusual item in the income statement b. addition to (or deduction from) net income in the income statement c. addition to (or a deduction from the beginning balance of retained earnings, d. addition to (or deduction from the ending balance of retained earnings. Jodie Corporation posted the 22 Sales Cost of goods solid Operating inclined in cevable.oles 40,000 Cash dividende received the set 2.000 To 2002. Jose would report commencemed Exercises In the space provided, write the word or phrase that is defined or indicated. Discontinued operations Comprehensive income. Prior period adjustment. Changes in accounting principle. Earnings per share 1. Net income minus preference dividends divided by the weighted average of ordinary shares outstanding. 1. 2. All changes in equity during a period except those resulting from investments by owners and distributions to owners. 3. A correction of an error is reported as 3. a 4. 4 A change from one generally accepted principle to another 5. The income statement category for a disposal of a component of a business