Reference no: EM131264160
ABC is preparing its 2009 financial statements. Before taking into account the following information, net income from continuing operations before tax for 2009 was determined to be $500,000. ABC has a corporate tax rate of 30%.
A) ABC purchased equipment on January 1, 2008 for $20,000. On the date of purchase, ABC inadvertently expensed the entire $20,000 and failed to record depreciation in 2008 and 2009. The company would normally have used the straight-line depreciation method with a $2,000 salvage value and 18 year useful life.
B) On March 31, 2009, ABC discontinued and disposed of a component of their business. The component was sold for $310,000. At the time of disposal, the historical cost of the component was $1,000,000 and accumulated depreciation was $625,000. The component had a pre-tax net loss from operations of $60,000 from January 1, 2009 until the date it was sold.
C) Beginning Retained Earnings (as of 1/1/09) was $3,000,000 and dividends of $200,000 were declared and paid during 2009.
1) After making the appropriate adjustments, what is the correct amount of net income from continuing operations before tax that should be reported in the 2009 financial statements?
2) Prepare a partial income statement for the year 2009, beginning with net income from continuing operations before tax (use your corrected value from the first question).
3) What is the correct balance for Retained Earnings as of 1/1/2010?
|
Profit for both years using the variable costing method
: The following information is available for Skipper Pools, a manufacturer of above-ground swimming pool kits: In its first year of operation, the company produced 12,290 units but was able to sell only 10,300 units. Find the profit for both years usin..
|
|
Statement of cash flows
: In 2016, Chavez Company purchased land for $120,000 to use as a future site for its new office building. At the end of 2016, the land was worth $135,000. The company decided not to build the new office and sold the land for $132,000 cash in 2017. How..
|
|
What is the issue price of bond and debt-to-equity ratio
: On January 1, a company issues 8%. 5 year, $300,000 bonds that pay interest semiannually. On the issue date, the annual market rate of interest is 6%. What is the issue (selling) price of the bond? The debt-to-equity ratio: On January 1 of 2015, Pars..
|
|
What is the dividend yield for calzone stock
: Dividend Yield Over the last year, Calzone Corporation paid a quarterly dividend of $0.10 in each of the fourquarters. The current stock price of Calzone Corporation is $39.78. What is the dividend yield for Calzone stock?
|
|
What is the correct balance for retained earnings
: ABC is preparing its 2009 financial statements. Before taking into account the following information, net income from continuing operations before tax for 2009 was determined to be $500,000. ABC has a corporate tax rate of 30%. Prepare a partial inco..
|
|
What should you pay for the companys stock
: If the company plans to increase its dividend by 9 percent per year indefinitely, and you require a 12 percent return on your investment, what should you pay for the company's stock?
|
|
Compute the pension cost for the year
: Technique Technologies, Inc. started a? defined-benefit plan this year. As part of the union? agreement, it provided $560,000 in retroactive benefits to all employees for their prior? years' service. At the end of the? year, the actuary provided you ..
|
|
Why do irr and npv rank the two projects differently
: What are the IRRs of the two projects? If your discount rate is 5.0%, what are the NPVs of the two projects? Why do IRR and NPV rank the two projects differently?
|
|
Take a trip to a local supermarket
: Take a trip to a local supermarket where you are certain to find multiple brands of canned fruits and vegetables.
|