Homework Answers
| Sales revenue, cost of goods sold and operating expenses are reported in income from continuing operation in income statement | |||||||||||
| Cash dividend is reported as other income in income statement | |||||||||||
| Other comprehensive income includes unrealized gain or loss earned by business | |||||||||||
| Desert would therefore report $120,000 as other comprehensive income which is unrealized holding gain | |||||||||||
| Scenario A | |||||||||||
| The unrealized loss on Hedging transaction of $10,000 is not included as part of ICO and reported as other comprehensive income | |||||||||||
| No, unrealized loss is not included in income from continuing operations (ICO) | |||||||||||
| 2 | |||||||||||
| This is not reported in ICO | |||||||||||
| 3 | |||||||||||
| The $10,000 of unrealized loss is included in ICO and thus will need to be reversed that is added back to Income from continuing operation. | |||||||||||
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Question 1 1 pts Desert Company reported the following at December 31, 2019: Sales Revenue Cost...
Agave Company decided on February 1st to dispose of its Tequila Distilling division. Agave sold the...
Agave Company decided on February 1st to dispose of its Tequila Distilling division. Agave sold the Tequila Division on September 1st for a sales price of $440,000 but had to pay $20,000 in sales commissions. At the time of the sale, the division had a book value of $300,000. In the time between February 1st and September 1st, the Tequila division reported a loss from operations of $16,000. Agave Company has a tax rate of 30%. Starting with Income from...
Company inc. is preparing its financial statements. The company's accountant calculated Income from Continuing Operations to...
Company inc. is preparing its financial statements. The company's accountant calculated Income from Continuing Operations to be $500,000, but is not certain this number is accurate. Please review the following three scenarios and determine the appropriate adjustment to Income from Continuing Operations, if any, that is required for each item. All amounts listed are pre-tax unless otherwise noted. Corporate income tax rate is 30%. Scenario A: The Company has an unrealized loss on a Hedging Transaction of $10,000 (pre-tax). The...
Total of 6 questions. Question 9 0.71 pts USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT...
Total of 6 questions.
Question 9 0.71 pts USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT (6) QUESTIONS: Pitchfork, Inc. is preparing its 2020 financial statements. The company's accountant calculated Income from Continuing Operations to be $1,700,000, but upon further review is not certain this number is accurate. Pitchfork has a corporate income tax rate of 30%. Additionally, the company reports only one year of financial data on the face of the financial statements. All amounts listed are pretax unless...
Continuing from Question 2 Scenario C On March 1, 2019, Desert discovered that R&D costs of...
Continuing from Question 2 Scenario C On March 1, 2019, Desert discovered that R&D costs of $150,000 for 2017 were capitalized as a part of the Historical Cost of the Patent, instead of being expensed. Income from Continuing Operations for 2019 includes the current year's R&D costs of $125,000 as an expense. 1. What type of scenario is addressed? (Select] 2. What adjustment (if any) is needed to Desert's ICO for 2019? Select] 3. Does Desert need to restate its...
1B options- Continuing from Question 2. Scenario B: Desert, Co. purchased a truck for $50,000 on...
1B options-
Continuing from Question 2. Scenario B: Desert, Co. purchased a truck for $50,000 on January 1, 2016. The truck had an estimated salvage value of $5,000 and an estimated useful life of 10 years. Desert uses the straight-line depreciation method. On January 1, 2019 Desert revised the estimated salvage value to $10,000, but did not change the useful life. The accountant recorded depreciation expense using the old salvage value when calculating the $500,000 ICO. 1. Is an adjustment...
Pitchfork, Inc. is preparing its 2020 financial statements. The company's accountant calculated Income from Continuing Operations...
Pitchfork, Inc. is preparing its 2020 financial statements. The company's accountant calculated Income from Continuing Operations to be $1,700,000, but upon further review is not certain this number is accurate. Pitchfork has a corporate income tax rate of 30%. Additionally, the company reports only one year of financial data on the face of the financial statements. All amounts listed are pretax unless otherwise noted. After reviewing the following information, determine the appropriate adjustments, if any, to Income from Continuing Operations. Once...
On March 1, 2019, Desert discovered that R&D costs of $150,000 for 2017 were capitalized as...
On March 1, 2019, Desert discovered that R&D costs of $150,000 for 2017 were capitalized as a part of the Historical Cost of the Patent, instead of being expensed. Income from Continuing Operations for 2019 includes the current year's R&D costs of $125,000 as an expense. 1. What type of scenario is addressed? [ Select ] ["Change in Accounting Principle", "Change in Accounting Estimate", "Correction...
Continuing from Question 2... Scenario D: A strike by the employees of a supplier during the...
Continuing from Question 2... Scenario D: A strike by the employees of a supplier during the month of September 2019 resulted in a pre-tax loss of $125,000. This was considered an unusual loss and so was recorded as Other Comprehensive Income 1. Is there an error? [Select] 2. What adjustment (if any) is needed to Desert's ICO for 2019? [Select] 3. What adjustment (if any) is needed to Desert's Comprehensive Income for 2019? [ Select] Continuing from Question 2. Scenario...
Webber Corporation reported the following alphabetical items for the year ended December 31, 2019 (some of...
Webber Corporation reported the following alphabetical items for the year ended December 31, 2019 (some of Webber's balance sheet accounts have been omitted). Accumulated Depreciation Accumulated Other Comprehensive Income Available for Sale Securities Common Stock, $10 par Cost of Goods Sold (condensed) Dividends Declared ($3,000 for Preferred and $29,000 for Common) Dividend Revenue Gain on Sale of Equipment Interest Expense Loss from Discontinued Operations Net Sales Operating Expenses (condensed) Paid in Capital in Excess of Par - Common Preferred Stock,...
You have been given the following information as of December 31, 2020: Sales revenue: $5,900,000 Interest...
You have been given the following information as of December 31, 2020: Sales revenue: $5,900,000 Interest revenue: $40,000 Loss on sale of investments: $10,000 Unrealized Loss on debt investments: $160,000 Gain on sale of discontinued operations: $260,000 Cost of goods sold: $4,400,000 Selling expense: $400,000 Restructuring costs: $190,000 Interest expense: $20,000 Dividend revenue: $15,000 General and administrative expense: $300,000 The company had 100,000 shares of stock outstanding throughout the year. Income tax expense has not yet been accrued. The effective...
Agave Company decided on February 1st to dispose of its Tequila Distilling division. Agave sold the Tequila Division on September 1st for a sales price of $440,000 but had to pay $20,000 in sales commissions. At the time of the sale, the division had a book value of $300,000. In the time between February 1st and September 1st, the Tequila division reported a loss from operations of $16,000. Agave Company has a tax rate of 30%. Starting with Income from...
Total of 6 questions.
Question 9 0.71 pts USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT (6) QUESTIONS: Pitchfork, Inc. is preparing its 2020 financial statements. The company's accountant calculated Income from Continuing Operations to be $1,700,000, but upon further review is not certain this number is accurate. Pitchfork has a corporate income tax rate of 30%. Additionally, the company reports only one year of financial data on the face of the financial statements. All amounts listed are pretax unless...
Continuing from Question 2 Scenario C On March 1, 2019, Desert discovered that R&D costs of $150,000 for 2017 were capitalized as a part of the Historical Cost of the Patent, instead of being expensed. Income from Continuing Operations for 2019 includes the current year's R&D costs of $125,000 as an expense. 1. What type of scenario is addressed? (Select] 2. What adjustment (if any) is needed to Desert's ICO for 2019? Select] 3. Does Desert need to restate its...
1B options-
Continuing from Question 2. Scenario B: Desert, Co. purchased a truck for $50,000 on January 1, 2016. The truck had an estimated salvage value of $5,000 and an estimated useful life of 10 years. Desert uses the straight-line depreciation method. On January 1, 2019 Desert revised the estimated salvage value to $10,000, but did not change the useful life. The accountant recorded depreciation expense using the old salvage value when calculating the $500,000 ICO. 1. Is an adjustment...
Continuing from Question 2... Scenario D: A strike by the employees of a supplier during the month of September 2019 resulted in a pre-tax loss of $125,000. This was considered an unusual loss and so was recorded as Other Comprehensive Income 1. Is there an error? [Select] 2. What adjustment (if any) is needed to Desert's ICO for 2019? [Select] 3. What adjustment (if any) is needed to Desert's Comprehensive Income for 2019? [ Select] Continuing from Question 2. Scenario...
Webber Corporation reported the following alphabetical items for the year ended December 31, 2019 (some of Webber's balance sheet accounts have been omitted). Accumulated Depreciation Accumulated Other Comprehensive Income Available for Sale Securities Common Stock, $10 par Cost of Goods Sold (condensed) Dividends Declared ($3,000 for Preferred and $29,000 for Common) Dividend Revenue Gain on Sale of Equipment Interest Expense Loss from Discontinued Operations Net Sales Operating Expenses (condensed) Paid in Capital in Excess of Par - Common Preferred Stock,...
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