Reference no: EM132016297

1. Du Pont's 2000 segment reporting showed that Polyester had sales of $2,553 & operating income of $73, while Specialty Fibers had sales of $3,452 & operating income of $690. This indicates that:

a. Polyester had a higher operating return than Polyester

b. Du Pont should discontinue Specialty fibers & concentrate exclusively on Polyester

c. Polyester had an operating return of over 30%

d. Specialty fibers had a higher operating return than Polyester (20.0% vs. 2.9%)

2. Dow Chemical uses the all-current method for foreign currency translation. The translations adjustment for 2000 was -$120 and net income was $620. The translation adjustment was:

a. Reported as part of income from continuing operations which decreased taxes but also decreased net income

b. Reported as an other comprehensive income item

c. Reported directly to current liabilities

d. Reported as an extraordinary item which reduced net income

3. Dow Chemical had a Prepaid Pension Obligation of -$65; total assets of $27,645; and net income of $1,513, all for 2000. This means that:

a. Dow recorded a negative stockholders equity item of -$65

b. Dow had other comprehensive income of -$65

c. Dow recorded a nonrecurring item of -$65 on the income statement

d. Dow s pension plan was underfunded by $65 or 0.2% of total assets