indicate whether each item would be included on the company s income statement state 621780
Which statement is affected?
Listed below are transactions or items that are frequently reported in financial statements.
- Income effect due to changing from the double-declining-balance method to the straight-line method of depreciation.
- Collection of accounts receivable.
- Purchase of an insurance policy on December 31 that provides coverage for the following year.
- Accrued wages earned by the employees.
- Estimated uncollectible accounts receivable using the aging method.
- Recognized a gain on the sale of plant equipment.
- Recognized a loss when the government expropriated land for a highway.
- Declared a dividend valued at $100,000.
- Under the requirements of a debt covenant, appropriated a portion of retained earnings.
- Received dividends on stocks held as a short-term investment. The dividends were declared and paid on the same day.
- Recognized the cost of inventory sold during the year under the periodic method.
- Paid rent for the current year.
a. Indicate whether each item would be included on the company”s income statement, statement of shareholders” equity, or neither, using the following codes:
IS Income statement
SE Statement of shareholders” equity
N Neither
b. Indicate whether the items you coded IS would be considered (1) usual and frequent, (2) unusual or infrequent, (3) unusual and infrequent, or (4) other.
c. Provide a brief explanation of your choice in (b) of (1), (2), (3), or (4).