What would be the effect of the settlement

Assignment Help Accounting Basics
Reference no: EM133106731

Question - Tone Company is the defendant in a lawsuit filed by Witt in 2011 disputing the validity of copyright held by Tone. On December 31, 2011, Tone determined that Witt would probably be successful against Tone for an estimated amount of P400,000. Appropriately, a P400,000 loss was accrued by a charge to income for the year ended December 31, 2011. On December 31, 2012, Tone and Witt agreed to a settlement providing for cash payment of P250,000 by Tone to Witt, and transfer of Tone's copyright to Witt. The carrying amount of the copyright on Tone's accounting records was P60,000 on December 31, 2012. What would be the effect of the settlement on Tone's income before tax in 2012?

a. 150,000 increase

b. 60,000 decrease

c. 90,000 increase

d. 90,000 decrease

Reference no: EM133106731

Questions Cloud

What would be his monthly auto loan payments : Brad is considering a car purchase with his $11700 bonus. What would be his monthly auto loan payments if he were to borrow $28000 over 5 years
Calculate the redemption value of the bond : The bond is priced at 115.85 to yield an annual nominal rate of 6% compounded semi-annually. Calculate the redemption value of the bond
Prepare the cash flows from financing activities : Interest expense for the period was $8,000. The interest payable account increased $2,000. Prepare the cash flows from financing activities
What total amount should be recognized : His salary for January will be P50,000 and his retrenchment package will be P150,000, What total amount should be recognized
What would be the effect of the settlement : The carrying amount of the copyright on Tone's accounting records was P60,000 on December 31, 2012. What would be the effect of the settlement on Tone's income
Calculate the VFCC, VFD, CD, VFT, GST and TDTP : The first item you would like to import is fillet Knives with fixed blades. Calculate the VFCC, VFD, CD, VFT, GST and TDTP
What kind of risks are associated with these actions : What kind of risks are associated with these actions and How do you mitigation the risks - How do you know if the actions are successfully in addressing
Record the journal entry to correct december payroll amounts : Additional government pension to be paid by employer $1,200. Record the journal entry to correct the December 24 payroll amounts
Determine the budgeted cash Payments for January : Determine the budgeted cash Payments for January from the following information: Operating Expenses incurred for December $33,000 and January $36,000

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd