G Preparing financial statements

The estimated income tax for the year is $30,000. The previous year's provision of $25,000 was settled at $26,200. What is the income tax expense?

• 1 $31,200
• 2 $26,200
• 3 $30,000
• 4 $28,800

Revenue is $500,000, cost of sales $300,000, selling expenses $50,000 and administrative expenses $40,000. What is the operating profit?

• 1 $200,000
• 2 $110,000
• 3 $150,000
• 4 $160,000

Which is an adjusting event after the reporting period?

• 1 A fire destroys a warehouse after the year end
• 2 A new loan is taken out after the year end
• 3 The company issues new shares after the year end
• 4 A customer goes bankrupt, confirming that a receivable at the year end is irrecoverable

Which is a non-adjusting event after the reporting period?

• 1 A fire destroys a warehouse after the year end
• 2 Inventory is found to be damaged before the year end
• 3 A customer's bankruptcy confirms a debt owed at the year end is irrecoverable
• 4 A court case that was ongoing at the year end is settled

Profit before income taxes is $50,000, depreciation $8,000, receivables increased by $6,000, payables increased by $3,000 and inventories decreased by $2,000. What is cash from operations (before income taxes paid)?

• 1 $53,000
• 2 $57,000
• 3 $41,000
• 4 $59,000

In a statement of cash flows, the purchase of equipment is classified as:

• 1 Operating activities
• 2 It is not shown
• 3 Financing activities
• 4 Investing activities

In a statement of cash flows, the payment of a dividend to shareholders is classified as:

• 1 Operating activities
• 2 Financing activities
• 3 Investing activities
• 4 It is not shown

A sole trader's cost of sales is $60,000 and goods are sold at a mark-up of 25 percent on cost. What are the sales?

• 1 $85,000
• 2 $80,000
• 3 $60,000
• 4 $75,000

Opening net assets were $40,000 and closing net assets $55,000. Drawings were $12,000 and no capital was introduced. What was the profit for the year?

• 1 $67,000
• 2 $15,000
• 3 $3,000
• 4 $27,000

A revaluation gain on a non-current asset is reported in:

• 1 Other comprehensive income
• 2 Operating expenses
• 3 Cost of sales
• 4 Revenue