‘ACC002S; Intermediate Accounting Session 3 Homework Assianment Due, Monday, October 23, 2017 <— Chapter 5 1 U.S. GAAP and IFRS companies commonly measure and report net income and comprehensive income. True b. False Interperiod tax allocation involves apportioning a corporation's total income tax expense for a period to the various components of its net income and other comprehensive income items. When a parent company owns a majority of the common shares of a subsidiary company but not 100% of them, the parent company will consolidate all of the subsidiary’s revenues and expenses into its financial statements. True b. False ‘A.company does not have to disclose information about the sale of a discontinued component in the notes to its financial statements until the actual sale has occurred, There is no prescribed income statement format under IFRS whereas U.S. GAAP requires the use of the single-step or the multiple-step format. (True b. False To compute earnings per share the denominator is net income attributable to common shareholders less any preferred stock dividends for the period. a. True PB False Under U.S. GAAP or IFRS, a company can either report its comprehensive income or loss under present net income and comprehensive income in a single continuous performance statement or report it in a separate but consecutive financial statement. a. True b. False 1016/2017 1‘ACCO0023; Intermediate Accounting ‘Session 3 Homework Assignment Due, Monday, October 23, 2017 8. Whois the income statement designed to inform? a. creditors b. investors c. lenders ff The income statement is designed to inform all of these users. 9. The income statement helps users a. assess the company's risk, b. review the impact of economic factors affecting the company. ¢. compare and contrast performance against a competitor. All of these answer choices are ways in which the income statement helps users, 10. In accrual accounting, net income is defined as a, Revenues ~ Expenses + Gains + Losses b. Revenues - Expenses ff Revenues ~ Expenses + Gains ~ Losses d. increase in net assets from nonowner transactions 1011872017ACC0023; Intermediate Accounting Session 3 Homework Assignment Due, Monday, October 23, 2017 11, Below is a list of account balances for Fraggle Company: ash 5 123,500 [Cost of Goods Sold 767,500 [Gross Profit, 507,500, income before taxes 2334001 ——7 233.40 [income tax expense ? 9 Interest expense 14,700 X 30h Rate interest revenue 5,600 inventory 113,460 Lj 10,0207 ~Tax Net Income ? jumber of Common Shares 150,000 2400 — albove (Operating expenses 265,000 233,4 [Operating income 242,500 \63 30 Property, plant, and equipment 255,000 1 inet) eceivables (net) 96,000 Sales (net) 1,275,000, ‘What is Fraggle Company's net income, assuming a 30% tax rate? $163,380 b. $233,400 c. $242,500 d. None of these answer choices is correct. 12. Depreciation is an example of which expense recognition principle? a, association of cause and effect # systematic and rational allocation ¢. cost recovery d. immediate recognition 101162017 3