Things To Remember

Question 1

What is included in operating expenses?

Answer 1

Supplies expense
Other expense
Wage expense
Depreciation expense
(Could be more)
Earnings from operation

Question 2

Non-Operating Expense

Answer 2

Interest expense
Earnings before income tax
Income tax
Net Earnings
Net Earnings per share

Question 3

Employment Income =

Answer 3

A + B + C - D

A - All cash paid to employee
B - All benefits received or enjoyed
C - Allowances
D - Deductions

Question 4

What basis is employment income determined on, Cash or Accrual?

Answer 4

Cash basis, regardless of when they are earned

Question 5

Shareholders’ Equity part of the Statement of Financial Position

Answer 5

Common shares 130,000 3,040,000
Retained Earnings 860,000
Shareholders’ Equity 3,900,000

Question 6

Statement of Changes in Equity

Answer 6

Contributed capital RE Total
Beg. Balance
Issuance of shares
Net Earnings
Dividends
Share buy-back
Ending balance

Question 7

Taxation of Business Income

Answer 7

Federal tax - income x 38%
Less: tax abatement - income x 10%
SBD - 19%
Anything over the 500,000 x 13%

Question 8

Taxation for Public Company

Answer 8

income x 15%