Which of the following is false about an income statement? Items that cannot be measured reliably are not reported in the income statement. It is used to measure the solvency of a company. Income measurement involves judgment. Income numbers are affected by the accounting methods employed. QUESTION 12 Which of the following is an example of managing earnings down? Changing the estimated bad debts from 3 percent to 2.5 percent of sales. Revising the estimated life of equipment from 10 years to 8 years. Not writing off obsolete inventory. Reducing research and development expenditures. QUESTION 13 For Mortenson Company, the following information is available: Cost of goods sold $390,000 Dividend revenue 15,000 Income tax expense 36,000 Operating expenses 138,000 600,000 Sales revenue In Mortenson's multiple-step income statement, gross profit should not be reported should be reported at $51,000. should be reported at $210,000. should be reported at $225,000