Question
1a. Loss from tornado $ 1 0,000 by a Company located in a place where tornado is not expected to happen again. Tax rate is
Common shares outstanding January 1, 2017100,000
Common shares issued Nov. 1, 2017 36,000
6% preferred stock outstanding$100,000
Net income during 2017$112,000
Retained Earnings January 1 2017: $10,000
Net income for 2017: $30,000
Dividend declared in 2017: $5,000
Service revenue was understated in 2016 by $5,000 and that was detected in 2017
Tax rate is 40%. Compute the Retained Earnings balance at the end of the period:
Income from operations of discontinued component: $10,000
Book value of the discontinued component $50,000
Fair market value of the component $45,000
Cost of goods sold $20,000
Tax rate: 40%
Sales revenue $50,000
Selling $ administrative expenses$5,000
How much will be reported under Discontinued Operations & how much is
Operating income? How much is net income?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started