On January 1, 20x7, Collins Company changed the original economic life of its sugar beet harvesting machine from ten years to seven years. Collins paid 120,000 for the machine on December 31, 20x3. Collins marginal tax rate is 30%. How would Collins present this this change in accounting estimate on its 20x7 income statement

• A.

  In a disclosure note, reporting a decrease in net income of $6,300

• B.

  The change would not require disclosure

• C.

  In a disclosure note, reporting a decrease in net income of $9,000

• D.

  In a disclosure note, reporting a decrease in net income of $21,000

• Jasmine Inc has a cell phone retail establishment in its portfolio of companies. The Cell phone establishment generates operating income of $6,000 per month. On October 1, Year Four, the establishment is sold at a loss of $96,000. The effective tax rate is 30 percent. Jasmine is now preparing comparative statements for Year Three and Four. Which of the following statements is true

• A.

  If this is viewed as a discontinued operation, the $(96,000) will be reported by the company within its other gains and losses on the income statement

• B.

  If this is viewed as a discontinued operation, the income/loss from discontinued operation at the bottom of the Year Four income statement would show $(29,400).

• C.

  If this is viewed as a discontinued operation, the income statement for Year five will be reconfigured but net income is not changed

• D.

  If this is viewed as a discontinued operation, the income from discontinued operation at the bottom of the Year Four income statement would show $(42,000).

• Performance OverArmour Co. manufactures and sells clothing, shoes, and athletic equipment. Performance incurred substantial losses associated with its shoe division. The shoe division can clearly identify its operations and cash flows from the balance of the other groups. Performance plans to sell the shoe division. At what point can performance report the group as a discontinued operation

• A.

  The date Performance sells any assets of the group

• B.

  The date Performance receives a contingent offer on the group

• C.

  The date Performance classifies the group as held for sale

• D.

  The date the majority of the assets of the group are sold