Reference no: EM132740632
Question 1 - The records containing several transactions incurred by Forbes Corporation at December 31, 2021 showed the following balances:
Bad debts expense 2,750,000
Freight out 4,000,000
Cost of sales 46,350,000
Loss on sale of equipment 2,000,000
Loss on early retirement of long-term debt 3,000,000
Sales 97,500,000
Interest income 4,850,000
Administrative expenses 11,250,000
Finished goods inventory, January 1 60,000,000
Sales commissions 6,000,000
Finished goods inventory, December 31 55,000,000
Income tax rate 30%
What amount shall Forbes Corporation shall report as its net income for the year 2021?
a. 56,000,000 b. 30,000,000 c. 21,000,000 d. 18,000,000
Question 2 - In year 1, Casio Company provided the following information:
Sales 50,000,000
Cost of goods sold 30,000,000
Distribution costs 5,000,000
General and Administrative expenses 4,000,000
Interest expense 2,000,000
Gain on early extinguishment of long-term debt 500,000
Correction of inventory error, net of income tax-credit 1,000,000
Investment income-equity method 3,000,000
Gain on expropriation 2,000,000
Income tax expense 5,000,000
Dividends declared 2,500,000
What is the income before income tax?
a. 9,500,000 b. 14,500,000 c. 15,500,000 d. 14,000,000