Question 51 Under the liability method of accounting for deferred taxes, deferred tax: A) liability and asset accounts are adjusted to changes in tax rates as changes take place. B) expense is calculated using current tax rates with no adjustments. C) liability and asset accounts are maintained at historical tax rates until they reverse. D) liability and asset accounts come into existence when tax rates change.
Question 52 Two growing firms are identical except that Alfred Company capitalizes costs for long-lived assets over time whereas Canute Company expenses these costs. For these two firms, which of the following financial statement effects is generally least accurate? Alfred will show: A) less volatile reported income than Canute. B) higher cash flows from operations than Canute. C) more volatile return on assets than Canute. D) lower leverage ratios than Canute. Question 53 Which of the following items would affect owners’ equity and also appear on the income statement? A) Unrealized gains and losses from available-for-sale securities. B) Dividends paid to shareholders. C) Foreign currency translation gains and losses.
D) Unrealized gains and losses from trading securities. Question 54 Lawson, Inc.’s net income for the year was $1,060,000 with 420,000 shares outstanding. Lawson has 2,000 shares of 8%, $1,000 par value convertible preferred stock that were outstanding the entire year. Each share of preferred is convertible into 50 shares of common stock. Lawson's diluted earnings per share are closest to: A) $2.04. B) $2.14. C) $2.52. D) $1.94.
Question 55 Evergreen Company’s financial records disclose the following: ♣ A milling machine was purchased January 1, 20X1 for $18,000,000. ♣ Depreciation was taken in 20X1, 20X2 and 20X3 using the straight-line depreciation method. ♣ Salvage value was estimated to be $2,000,000. ♣ Useful life was originally estimated to be 12 years. At the beginning of 20X4, Evergreen changes the estimated useful life of the milling machine to a total of 18 years and salvage value to $3,000,000. Because of these changes, 20X4 pretax income will be: A) $600,000 higher than what it would have been without the change. B) $600,000 lower than what it would have been without the change. C) $333,333 higher than what it would have been without the change. D) $333,333 lower than what it would have been without the change. | 
发表于 2008-11-6 16:13
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