CH 1.3

Question 1

CH 1.3

Transactions not included in income are (4)

Answer 1

1. transactions with owners2. prior period adjustments3. items on comp income4. appropriated retained earnings

Question 2

CH 1.3

COGS calculation, retail

Answer 2

beginning inventoryplus purchasesplus frt in= good for saleminus ending inventory= cogs

Question 3

CH 1.3

COGS calculation, manufacturer

Answer 3

beginning raw materialsplus purchasesless ending raw materials= direct materials used in productionplus direct laborplus manufacture cost= total manufacture costplus beginning WIPless ending WIP= COGMplus beginning FGless ending FG= COGS

Question 4

CH 1.3

Multiple step income statement

Answer 4

Net salesless COGS= gross profitless selling expless admin= income from operationsplus other revenue and gainsless other expenses and losses= income before taxesless tax = net income

Question 5

CH 1.3

discontinued and extraordinary items are reported on income statement…

Answer 5

net of tax, after tax applied

Question 6

CH 1.3

order of reporting extraordinary items on income statement

Answer 6

net income from continuing operationsless discontinued ops= income before extra itemsless misc losses= net income

Question 7

CH 1.3

income statement note disclosures include (4)

Answer 7

1. earnings per share2. depreciation schedules3. income tax expense4. pension expense

Question 8

CH 1.3

Major comprehensive items are… (4)

Answer 8

1. gain or loss on hedging instrument in cash flow hedge2. unrealized gain or loss to fair value of securities available for sale3. foreign ops translation gains/losses4. post retirement plan definitions