Question 1 Prorok Music Inc. decides to sell an old piece of equipment and recei

Question

Question 1

Prorok Music Inc. decides to sell an old piece of equipment and receives $5,000 cash for it. The original cost of the equipment was $50,000 and it had accumulated depreciation of $47,000 associated with it.

Which of the following items would be increased by the sale of the old equipment? (check all that apply)

Net Income

Cash from Investing Activities

Gain on Sale

Accumulated Other Comprehensive Income

Equipment

Question 2

In 2010, Stohs Seafood Inc. acquired Boychuk Barbies Ltd. in a hostile takeover. However, the expected synergies never materialized. In 2013, Stohs decided to write-off $45 million of Goodwill on the financial statements to recognize that the Goodwill had become impaired.

Which of the following items would be decreased by the impairment of Goodwill? (check all that apply)

Total Assets

Total Shareholders

Explanation / Answer

1. cash from investing activities, gain on sale, cash from operating activities 2. good will, loss on goodwill impairement 3. loss on sale on investments, total assets, cash from financing activities 4. total liabilities, mortgage payable, accumulated other income 5. total shareholders equity, bonds payable, 6. cash from investing activities, net income, bonds payable, 7 pretax income, taxable income, effective tax rate, 8. cash from financinf activitiens, cash from investing activities, 9. total shareholders equity, income tax expense, 10 total shareholders equity, cash from operating act, cash from investing act. 11. total shareholders equity, common stock, shares outstanding, additional paid in capital 12. total liabilities, total assets, net income

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