500,000 SHARES.EXPLANATIONWEIGHTED AVERAGE SHARES = 000,000 + (0.7...

1, - UNDERSTANDING INCOME STATEMENTS 1 1, - UNDERSTANDING INCOME STATEMENTS 1 1, - UNDERSTANDING INCOME STATEMENTS 1
UNDERSTANDING INCOME STATEMENTS 1
1,500,000 shares.ExplanationWeighted average shares = 1,000,000 + (0.75) 300,000 + (0.5) 200,000 = 1,325,000 shares

Question #15 of 90

Question ID: 414089

CPP Corporation has a contract to build a custom test chamber for a client for $100,000. CPP Corporation uses the percentage-of-completion method for accounting and estimates the total costs for the project to be equal to $80,000. CPP Corporation haspromised to complete the project within three years. At year-end the customer has paid $60,000, equaling the total amount billedfor the year, and total costs incurred to date are $40,000. On the income statement, net income for the year-end will be:غ A)-$10,000.غ B)$20,000.ض C)$10,000.Under the percentage-of-completion method, one-half of the total revenue is recognized because one-half of the costs have beenincurred ($40,000 / $80,000). Therefore, revenue will be equal to $50,000, expenses are $40,000, and net income will be

Question #16 of 90

Question ID: 414098

Are changes in accounting principles and extraordinary items treated similarly in accordance with U.S. Generally AcceptedAccounting Principles and International Financial Reporting Standards?Accounting principles Extraordinary itemsNo NoYes YesYes NoTreatment of a change in an accounting principle is similar under U.S. GAAP and IFRS. Under both standards, a change inaccounting principle is made retrospectively. The treatment of extraordinary items differs between U.S. GAAP and IFRS. UnderU.S. GAAP, extraordinary items are reported net of tax below income from continuing operations. IFRS does not permit firms totreat transactions as extraordinary in the income statement.

Question #17 of 90

Question ID: 414117

A firm's financial statements reflect the following:

Net income $1,700,000

EBIT $2,900,000

Effective tax rate 35%

Interest payments $285,000

Common equity $3,100,000

Total assets $6,600,000

Preferred dividends paid $1,100,000

Weighted avg. shares outstanding 523,000

Based on this information, what is the firm's basic EPS?$3.25.$2.75.$1.15.The firm's basic EPS = ($1,700,000 - $1,100,000) / (523,000) = $1.147.

Question #18 of 90

Question ID: 414062

Would an increase in the cost of raw materials used in the production of inventory and would an increase in marketing expensesresult in lower gross profit?Increase inraw materials costmarketing expenseNo Yesض B)غ C)Gross profit is equal to sales minus cost of goods sold. Cost of goods sold includes the direct costs of producing a product orservice such as raw materials, direct labor, and overhead (fixed costs). Thus, an increase in raw materials costs will result inhigher cost of goods sold and lower gross profit. Marketing expenses are considered operating expenses (SG&A), not in cost ofgoods sold.

Question #19 of 90

Question ID: 414211

In applying the treasury stock method, if warrants allow the purchase of 1 million shares at $42 per share when the average priceis $56 per share, how many shares will be added to the firm's weighted average number of shares outstanding?ض A)