Morton Company Has the Following Transactions in the Current Year

question 98

Multiple Choice

Morton Company has the following transactions in the current year. Assuming that all of the transactions are material, which of them will most likely have no effect on current year net income?

• A) advance in technology that renders certain inventory items obsolete
• B) retirement of callable bonds at a premium
• C) sale of used equipment that had been fully depreciated in prior years
• D) increase in the fair value of certain available-for-sale securities held as an investment

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Definitions:

Fibula

A long, thin bone of the lower leg, situated lateral to the tibia, that stabilizes the ankle and supports lower leg muscles.

Carpals

The eight bones that make up the wrist, connecting the hand to the forearm.

Metacarpals

The metacarpals are the five long bones in the hand that connect the wrist (carpal bones) to the fingers.

Phalanges

The bones in the fingers and toes of the human body.