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For interim financial reporting, a company's income tax provision for the second quarter of 2017 should be determined using the:


A) statutory tax rate for 2017.
B) effective tax rate expected to be applicable for the full year of 2017 as estimated at the end of the first quarter of 2017.
C) effective tax rate expected to be applicable for the full year of 2017 as estimated at the end of the second quarter of 2017.
D) effective tax rate expected to be applicable for the second quarter of 2017.

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For external reporting purposes, it is appropriate to use estimated gross profit rates to determine the ending inventory value for:


A) Interim Reporting, No; Annual Reporting, No
B) Interim Reporting, No; Annual Reporting, Yes
C) Interim Reporting, Yes; Annual Reporting, No
D) Interim Reporting, Yes; Annual Reporting, Yes

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Walleye Industries operates in four different industries. Information concerning the operations of these industries for the year 2017 is: Walleye Industries operates in four different industries. Information concerning the operations of these industries for the year 2017 is: Required: Complete the following schedule to determine which of the above segments must be treated as reportable segments. Required: Complete the following schedule to determine which of the above segments must be treated as reportable segments. Walleye Industries operates in four different industries. Information concerning the operations of these industries for the year 2017 is: Required: Complete the following schedule to determine which of the above segments must be treated as reportable segments.

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XYZ Corporation has eight industry segments with sales, operating profit and loss, and identifiable assets at and for the year ended December 31, 2017, as follows: XYZ Corporation has eight industry segments with sales, operating profit and loss, and identifiable assets at and for the year ended December 31, 2017, as follows: Required: A. Identify the segments, which are reportable segments under one or more of the 10 percent revenue, operating profit, or assets tests. B. After reportable segments are determined under the 10 percent tests, they must be reevaluated under a 75 percent revenue test before a final determination of reportable segments can be made. Under this 75 percent test, identify if any other segments may have to be reported. Required: A. Identify the segments, which are reportable segments under one or more of the 10 percent revenue, operating profit, or assets tests. B. After reportable segments are determined under the 10 percent tests, they must be reevaluated under a 75 percent revenue test before a final determination of reportable segments can be made. Under this 75 percent test, identify if any other segments may have to be reported.

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A. Revenue Test - 10% ($6,800,000 + $1,2...

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A segment is considered to be significant if its:


A) reported profit is at least 10% of the combined profit of all operating segments.
B) reported profit (loss) is at least 10% of the combined reported profit of all operating segments not reporting a loss.
C) reported profit (loss) is at least 10% of the combined reported loss of all operating segments that reported a loss.
D) reported profit (loss) is at least 10% of the combined reported profit of all operating segments not reporting a loss; and reported profit (loss) is at least 10% of the combined reported loss of all operating segments that reported a loss.

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Determine the amount of revenue for each of the three segments that would be used to identify the reportable industry segments in accordance with the revenues test specified by SFAS 131. Determine the amount of revenue for each of the three segments that would be used to identify the reportable industry segments in accordance with the revenues test specified by SFAS 131. A) Wholesale, $3,600; Retail, $1,500; Finance, $ -0- B) Wholesale, 4,000; Retail, 1,740; Finance, -0- C) Wholesale, 4,000; Retail, 1,980; Finance, 980 D) Wholesale, 4,000; Retail, 2,380; Finance, 980


A) Wholesale, $3,600; Retail, $1,500; Finance, $ -0-
B) Wholesale, 4,000; Retail, 1,740; Finance, -0-
C) Wholesale, 4,000; Retail, 1,980; Finance, 980
D) Wholesale, 4,000; Retail, 2,380; Finance, 980

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Long Corporation's revenues for the year ended December 31, 2017, were as follows: Long Corporation's revenues for the year ended December 31, 2017, were as follows: Long has a reportable segment if that segment's revenues exceed A) $80,000. B) $90,500. C) $94,000. D) $14,000. Long has a reportable segment if that segment's revenues exceed


A) $80,000.
B) $90,500.
C) $94,000.
D) $14,000.

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Which of the following is NOT a segment asset of an operating segment?


A) Assets used jointly by more than one segment.
B) Assets directly associated with a segment.
C) Assets maintained for general corporate purposes.
D) Assets used exclusively by a segment.

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During the second quarter of 2017, Clearwater Company sold a piece of equipment at a gain of $90,000. What portion of the gain should Clearwater report in its income statement for the second quarter of 2017?


A) $90,000
B) $45,000
C) $30,000
D) $ -0-

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Publicly owned companies are usually required to file some type of quarterly (interim) report as part of the agreement with the stock exchanges that list their stock. Indicate two problems with interim reporting and GAAP's position on this reporting.

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Problems associated with interim reporti...

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Itchy Company's actual earnings for the first two quarters of 2017 and its estimate during each quarter of its annual earnings are: Itchy Company's actual earnings for the first two quarters of 2017 and its estimate during each quarter of its annual earnings are: Itchy Company estimated its permanent differences between accounting income and taxable income for 2017 as: These estimates did not change during the second quarter. The combined state and federal tax rate for Itchy Company for 2017 is 40%. Required: Prepare journal entries to record Itchy Company's provisions for income taxes for each of the first two quarters of 2017. Itchy Company estimated its permanent differences between accounting income and taxable income for 2017 as: Itchy Company's actual earnings for the first two quarters of 2017 and its estimate during each quarter of its annual earnings are: Itchy Company estimated its permanent differences between accounting income and taxable income for 2017 as: These estimates did not change during the second quarter. The combined state and federal tax rate for Itchy Company for 2017 is 40%. Required: Prepare journal entries to record Itchy Company's provisions for income taxes for each of the first two quarters of 2017. These estimates did not change during the second quarter. The combined state and federal tax rate for Itchy Company for 2017 is 40%. Required: Prepare journal entries to record Itchy Company's provisions for income taxes for each of the first two quarters of 2017.

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Which of the following disclosures is NOT required to be presented for a firm's reportable segments?


A) Information about segment assets
B) Information about the bases for measurement
C) Reconciliation of segment amounts and consolidated amounts for revenue, profit or loss, assets, and other significant items.
D) All of these must be presented.

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Which of the following does NOT have to be disclosed in interim reports?


A) Seasonal costs or expenses.
B) Significant changes in estimates.
C) Disposal of a segment of a business.
D) All of these must be disclosed.

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To determine whether a substantial portion of a firm's operations are explained by its segment information, the combined revenue from sales to unaffiliated customers of all reportable segments must constitute at least:


A) 10% of the combined revenue of all operating segments.
B) 75% of the combined revenue of all operating segments.
C) 10% of the combined revenue from sales to unaffiliated customers of all operating segments.
D) 75% of the combined revenue from sales to unaffiliated customers of all operating segments.

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Which of the following is NOT part of the information about foreign operations that is required to be disclosed?


A) Revenues from external customers
B) Operating profit or loss, net income, or some other common measure of profitability
C) Capital expenditures
D) Long-lived assets

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If a cumulative effect type accounting change is made during the first interim period of a year:


A) no cumulative effect of the change should be included in net income of the period of change.
B) the cumulative effect of the change on retained earnings at the beginning of the year should be included in net income of the first interim period.
C) the cumulative effect of the change should be allocated to the current and remaining interim periods of the year.
D) none of these.

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In considering interim financial reporting, how did the Accounting Principles Board conclude that each reporting should be viewed?


A) As a "special" type of reporting that need not follow generally accepted accounting principles.
B) As useful only if activity is evenly spread throughout the year so that estimates are unnecessary.
C) As reporting for a basic accounting period.
D) As reporting for an integral part of an annual period.

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Morgan Company prepares quarterly financial statements. The following information is available concerning calendar year 2017: Morgan Company prepares quarterly financial statements. The following information is available concerning calendar year 2017: Required: Compute the income tax provision for the first quarter of 2017. Required: Compute the income tax provision for the first quarter of 2017.

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Selected data for a segment of a business enterprise are to be separately reported in accordance with SFAS No. 131 when the revenues of the segment is 10% or more of the combined:


A) net income of all segments reporting profits.
B) external and internal revenue of all reportable segments.
C) external revenue of all reportable segments.
D) revenues of all segments reporting profits.

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An inventory loss from a market price decline occurred in the first quarter. The loss was not expected to be restored in the fiscal year. However, in the third quarter the inventory had a market price recovery that exceeded the market decline that occurred in the first quarter. For interim reporting, the dollar amount of net inventory should:


A) decrease in the first quarter by the amount of the market price decline and increase in the third quarter by the amount of the market price recovery.
B) decrease in the first quarter by the amount of the market price decline and increase in the third quarter by the amount of the decrease in the first quarter.
C) not be affected in the first quarter and increase in the third quarter by the amount of the market price recovery that exceeded the amount of the market price decline.
D) not be affected in either the first quarter or the third quarter.

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