Listed below are several terms and phrases associated with income statement presentation and the statement ofcash flows. Pair each item from List A (by letter) with the item from List B that is most appropriately associatedwith it.List A List B_____ 1. Intraperiod tax allocation_____ 2. Comprehensive income_____ 3. Unrealized holding gain oninvestments_____ 4. Operating income_____ 5. A discontinued operation_____ 6. Earnings per share_____ 7. Prior period adjustment_____ 8. Financing activities_____ 9. Operating activities (SCF)_____ 10. Investing activities_____ 11. Direct method_____ 12. Indirect methoda. An other comprehensive income itemb. Starts with net income and works backwards to convert tocashc. Reports the cash effects of each operating activity directly onthe statementd. Correction of a material error of a prior periode. Related to the external financing of the companyf. Associates tax with income statement itemg. Total nonowner change in equityh. Related to the transactions entering into the determination ofnet incomei. Related to the acquisition and disposition of long-term assetsj. Required disclosure for publicly traded corporationk. A component of an entityl. Directly related to principal revenue-generating activitiesThe following is a portion of the condensed income statement for Rowan, Inc., a manufacturer of plasticcontainers:Net sales $2,460,000Less: Cost of goods sold:Inventory, January 1 $ 630,000Net purchases 1,900,000Inventory, December 31 (690,000) 1,840,000Gross profit $ 620,000Required:1. Determine Rowan’s inventory turnover.2. What information does this ratio provide?
Listed below are several terms and phrases associated with income statement presentation and the statement of
cash flows. Pair each item from List A (by letter) with the item from List B that is most appropriately associated
with it.
List A List B
_____ 1. Intraperiod tax allocation
_____ 2. Comprehensive income
_____ 3. Unrealized holding gain on
investments
_____ 4. Operating income
_____ 5. A discontinued operation
_____ 6. Earnings per share
_____ 7. Prior period adjustment
_____ 8. Financing activities
_____ 9. Operating activities (SCF)
_____ 10. Investing activities
_____ 11. Direct method
_____ 12. Indirect method
a. An other comprehensive income item
b. Starts with net income and works backwards to convert to
cash
c. Reports the cash effects of each operating activity directly on
the statement
d. Correction of a material error of a prior period
e. Related to the external financing of the company
f. Associates tax with income statement item
g. Total nonowner change in equity
h. Related to the transactions entering into the determination of
net income
i. Related to the acquisition and disposition of long-term assets
j. Required disclosure for publicly traded corporation
k. A component of an entity
l. Directly related to principal revenue-generating activities
The following is a portion of the condensed income statement for Rowan, Inc., a manufacturer of plastic
containers:
Net sales $2,460,000
Less: Cost of goods sold:
Inventory, January 1 $ 630,000
Net purchases 1,900,000
Inventory, December 31 (690,000) 1,840,000
Gross profit $ 620,000
Required:
1. Determine Rowan’s inventory turnover.
2. What information does this ratio provide?
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