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Question 11
Ute Co. had the following capital structure during 2004 and
2005: Preferred stock is not considered a common stock
equivalent. Ute reported net income of $500,000 for the year
ended December 31, 2005. Ute paid no preferred dividends
during 2004 and paid $16,000 in preferred dividends during
2005. In its December 31, 2005, income statement, what
amount should Ute report as earnings per share?
Question 12
A manufacturer of household appliances may incur a loss due
to the discovery of a defect in one of its products. The
occurrence of the loss is reasonably possible and the resulting
costs can be reasonably estimated. This possible loss should be
Question 13
A hedge to offset the risk of loss on a recognized asset or
liability is which of the following types of hedge?
Question 14
Envoy Co. manufactures and sells household products. Envoy
experienced losses associated with its small appliance group.
Operations and cash flows for this group can be clearly
distinguished from the rest of Envoy's operations. Envoy plans
to sell the small appliance group with its operations. What is
the earliest point at which Envoy should report the small
appliance group as a discontinued operation?
Question 15