Reference no: EM1313552

Calculation of net income for the period and EPS.

1. Effective January 2,2007 Kincaid Co. adopted the accounting principle of expensing advertising and promotion costs as they're incurred. Previously advertising and promotion costs applicable to future periods were recorded in prepaid expenses. Kinvaid can justify the change which was made for both financial statement and income tax reporting purposes kincaid's prepaid advertising and promotion costs totaled 250000 at December 31,2006 and 2007 the adjustment for the effect of the change in accounting principle should result in a net charge against income in the 2007 income statement of...

2. Barker, Inc receives subscription payments for annual (one year)subscriptions to its magazine payments are recorded as revenue when received amounts received but unearned at the end of each of the last three years are shown below.

	2005	2006	2007
Unearned revenues	120000	150000	176000

3. kopppell co. made the following errors in counting its year-end physical inventories.

2000	60000	overstatement
2001	108000	understatement
	90000	overstatement

the entry to correct the accounts at the end of 2002 is..........

4. at December 31, 2006 the Murdock co. had 150000 shares of common stock issued and outstanding on April 1, 2007 an additional 30000 shares of common stock were issued Murdock's net income for the ended december31 2007 was 517500 during 2007 murdock declared and paid 300000 in cash dividends on its nonconvertible preferred stock the basic earnings per common share rounded to the nearest penny for the year ended December 31, 2006 should be..... 217500

5.

selected information from the accounting records of thome co. is as follows.
net sales for 2004	900000
cost of goods sold for 2004		600000
inventory at December 31 2004	er 31 2003		180000
inventory at December 31 2004			156000

6. landrover Inc. had 150000 shares of common stock issued and outstanding at dec.31 2005 on july 1,2006 an additional 25000 shares of common stock were issued for cash Landrover also had unexercised stock options to purchase 20000 shares of common stock at 15 per share outstanding at the beginning and end of 2006 the market price of Landrover's common stock was 20 throughout 2006.What number of shares should be used in computing diluted earnings per share for the year ended dec. 31,2006?

7. at dec.31,2005 the Roberts co. had 700000 shares of common stock outstanding on september 1,2006 an additional 300000 shares of common stock were issued in addition Beck had 20000000 of 8 percent convertible bonds outstanding at dec.31 2005 whick are convertible into 400000 shares of common stock No bonds were converted into common stock in 2006 the net income for the year ende dec.31 2006 was 6000000 assuming the income tax rate was 40 percent what should be the diluted earnings per share for the year ended dec. 31 2006?

8. the Gayle corporation reported a 66000 operating loss in 2006 in the preceding three years gayle reported the following income before taxes and paid in the indicated income taxes

year	income	taxes	tax rate
2003	36000	10800	30percent
2004	24000	8400	35
2005	48000	16800	35

the amount of tax benefit to be reported in 2006 arising from the tax carryback provisions of the current tax code would be...................

9. Begal corporation paid 20000 in january of 2006 for premiums on a two-year life insurance police that names the company as the beneficiary additionally begal corporations financial statements for the year ended december 31 2006 revealed the company paid 105000 in taxes during the year and also accrued estimated losses on disposal of unused plant facilities of 200000 assuming these facilities were sold in february of 2007( at which time a a 200000 loss was recognized for tax purposes) and that begal's tax rate is 30 percent for both 2006 2007 what amount should begal report as asset for net deferred income taxes on its 2006 balance sheet? Here the Unused plant facilities can be reported as the asset for 2006. I.e 200000 would be reported as assets in 2006

10. in 2005 the Worf company reported pretax financial income of 500000 included in that pretax financial income was 90000 of nontaxable life insurance proceeds received as a result of the Taxes payable on 31 December 2005 would be

11. hazard inc. manufactures equipment that's sold or leased. on december 31 2005 hazard leased equipment to Robards for a 5 years period expiring december 31 2010 at which date ownership of the leased asset will be transferred to robards.Equal 40000 payments under the lease are due on december 31 of each year the first payment was made on december 31 2005 collectibility of the remaining lease payments is reasonably assured and hazard has no material cost uncertainties the normal sales price of the equipment is 154000 and cost is 120000 for the year ended december 31 2005 how much income should hazard recognize from the lease transaction?

12. on december 31 2006 prince company appropriately chnged th the FIFO cost method from the weighted-agerage cost method for financial statement and income tax purposes the change will result in a 700000 increase in the beginning inventory at jan 1 2006 assuming a 40 percent income tax rate the cumulative effect of this accounting change reported for the year ended dec. 31 2006 is..........