ACCT 310 Intermediate Accounting I Week 2 Homework

ACCT 310 Intermediate Accounting I Week 2 Homework

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ACCT 310 Intermediate Accounting I Week 2 Homework

University of Maryland University College

Intermediate Accounting I

ACCT310

Week Two Homework

1.     Questions

1.     What is the organization that is responsible for setting International Financial Reporting Standards?

2.     What is the main company that Professor Levine uses for illustrations in the two Rutgers Digital videos?

3.     Open “Hoyle CPA: Earnings Per Share.” Under “Free Questions” select “Financial Accounting & Reporting.”

·         Under “Earnings Per Share” complete the multiple choice questions for “Basic Earnings Per Share” and “Diluted Earnings Per Share.” Enter your score here:

·         Under “Financial Statements” complete the multiple choice questions for “Discontinued Operations” and “Extraordinary Gains & Losses.” Enter your score here:

4.     For these questions you will need to access 1) “Accountants’ Handbook: Chapter 4, Financial Statements, Form and Content (to access this first click on the “Content” tab, then scroll down and click on “Week 1”) and 2) “UMUC updated US FASB Codification students” ( to access this first click on the “Content” tab and then scroll down and click on “Syllabus.” Finally, click on “UMUC updated US FASB Codification students” which is in the menu on the right.

·         Use the Accountants’ Handbook: Chapter 4, Financial Statements, Form and Content to locate the ASC code for “Extraordinary Items” and list the full code here:

·         Now use the UMUC updated US FASB Codification students and list at least three gains or losses that cannot be reported as extraordinary items below:

·         Use the Accountants’ Handbook: Chapter 4, Financial Statements, Form and Content to locate the ASC code for “Discontinued Operations” and list the full code here:

·         Now use the UMUC updated US FASB Codification students and list the two section for discontinued operations reported on the income statement here:

5.     According to the IASBFramework, what is the financial statement element that is defined as increases in economic benefits duringthe accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants?

ACCT310 Week 2 Homework Concluded: Page 2 of 2

1.     Exercises

1.     The Barr Company had the following items from their 2015 income statement:

Revenue                                  $725,000

Income tax expense                         33,565

Cost of goods sold                        443,056

Other operating expenses                   13,425

Salaries and wages expense                161,110

Unrealized gain on value of investments    26,852

Weighted average number of shares         140,000

Required: Prepare a single-step income statement for 2015.

2.     The following is a listing of accounts for Semper Company for the year ending December 31, 2015:

Cash                                    $ 65,000

Cost of goods sold                       235,000

Administrative expenses                  145,000

Cash dividends declared                   32,000

Cash dividends paid                       27,500

Selling expenses                          97,250

Discontinued operations loss

(before income taxes)                 (  52,250)

Net sales                                604,280

Depreciation expense that was

Not recorded in 2013                     42,500

Retained earnings, December 31, 2014     105,000

Tax rate 33%

Required: Compute net income for 2015

3.     The beginning merchandise inventory was overstated $10,000 in 2014, purchases were understated $7,000 in 2014 and the ending merchandise inventory was understated $12,000 in 2015. Assume that no corrections were made during 2014 or 2015. All other items in the income statement were correct.

·         What affect does this have on the cost of goods sold and net income for 2014 in dollars understated or overstated?

·         What affect does this have on net income and retained earnings in dollars understated or overstated for 2015?

4.     On December 1, 2015, Green Co. committed to a plan to dispose of its Smart business component’s assets. The disposal meets the requirements to be classified as discontinued operations. On that date, Green estimated that the loss from the disposition of the assets would be $1,500,000 and Smart’s 2015 operating losses were $475,000. Disregarding income taxes, what net gain (loss) should be reported for discontinued operations in Green’s 2015 income statement?