Which of the following statements regarding income from continuing operations is incorrect?
A) Income from continuing operations represents the part of the business that should continue from period to period.
B) Income from continuing operations helps investors make predictions about future earnings.
C) Income tax expense is subtracted to arrive at income from continuing operations.
D) A gain on sale of equipment is outside the business's core business and is not part of other income.
D) A gain on sale of equipment is outside the business's core business and is not part of other income.
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The clerk who opens the mail routinely steals remittances and checks. Describe a specific internal control procedure that would prevent or detect this fraud
Mondok Corporation has provided the following financial data:Balance SheetDecember 31, Year 2 and Year 1AssetsYear 2Year 1Current assets: Cash$139,000 $140,000 Accounts receivable, net 222,000 230,000 Inventory 109,000 120,000 Prepaid expenses 68,000 70,000 Total current assets 538,000 560,000 Plant and equipment, net 857,000 800,000 Total assets$1,395,000 $1,360,000 Liabilities and Stockholders' Equity Current liabilities: Accounts payable$186,000 $180,000 Accrued liabilities 34,000 30,000 Notes payable, short term 64,000 60,000 Total current liabilities 284,000 270,000 Bonds payable 130,000 130,000 Total liabilities 414,000 400,000 Stockholders' equity: Common stock, $2 par
value 100,000 100,000 Additional paid-in capital 90,000 90,000 Retained earnings 791,000 770,000 Total stockholders' equity 981,000 960,000 Total liabilities & stockholders' equity$1,395,000 $1,360,000 Income StatementFor the Year Ended December 31, Year 2Sales (all on account)$1,280,000 Cost of goods sold 840,000 Gross margin 440,000 Operating expenses 387,231 Net operating income 52,769 Interest expense 12,000 Net income before taxes 40,769 Income taxes (35%) 14,269 Net income$26,500 Required:a. What is the company's working capital at the end of Year 2?b. What is the company's current ratio at the end of Year 2?c. What is the company's acid-test (quick) ratio at the end of Year 2?d. What is the company's accounts receivable turnover for Year 2?e. What is the company's average collection period for Year 2?f. What is the company's inventory turnover for Year 2?g. What is the company's average sale period for Year 2?h. What is the company's operating cycle for Year 2?i. What is the company's total asset turnover for Year 2?j. What is the company's times interest earned ratio for Year 2?k. What is the company's debt-to-equity ratio at the end of Year 2?l. What is the company's equity multiplier at the end of Year 2? What will be an ideal response?
At the end of the current year, using the aging of receivable method, management estimated that $27,750 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a credit balance of $495. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?
A.
| Accounts Receivable | 27,750? | |
| Bad Debts Expense | 495? | |
| Sales | 28,245? |
B.
| Bad Debts Expense | 27,255? | |
| Allowance for Doubtful Accounts | 27,255? |
C.
| Bad Debts Expense | 28,245? | |
| Allowance for Doubtful Accounts | 28,245? |
D.
| Accounts Receivable | 28,245? | |
| Allowance for Doubtful Accounts | 28,245? |
E.
| Bad Debts Expense | 27,750? | |
| Allowance for Doubtful Accounts | 27,750? |
Which of the following is NOT a substitute for leadership?
a. characteristics of the task b. characteristics of the leader–follower relationship c. characteristics of the organization d. characteristics of the subordinates