Intermediate Accounting 1 Questions and Correct Answers

1



Intermediate Accounting 1 Questions and
Correct Answers

Norling Corporation reports the following information:


Net income $750,000


Dividends on common stock 210,000


Dividends on preferred stock 90,000


Weighted average common shares outstanding 200,000




Norling should report earnings per share of:


A. $3.30
B. $3.75.
C. $2.25
D. $2.70
Ans✅✅: A. $3.30

NI - PS (Dividends)/ CS outstanding = EPS

(750,000-90,000)/200,000 = 3.30


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, 2


The income statement reveals


A. resources and equities of a firm for a period of time.
B. net earnings (net income) of a firm for a period of time.
C. resources and equities of a firm at a point in time.
D. net earnings (net income) of a firm at a point in time.
Ans✅✅: B. net earnings (net income) of a firm for a period of time.


Madsen Company reported the following information for 2017:


Sales revenue $2,040,000


Cost of goods sold 1,400,000


Operating expenses 220,000


Unrealized holding gain on available-for-sale securities 120,000


Cash dividends received on the securities 8,000




For 2017, Madsen would report other comprehensive income of:


A. $120,000.
B. $428,000.
C. $128,000.
D. $420,000.

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