Question
Company C had the following investment. Help them determine the financial statement implications of the investment. Tax rate 21% Estimated tax payment 21,000 Investment cost
Company C had the following investment. Help them determine the financial statement implications of the investment.
| Tax rate | 21% |
| Estimated tax payment | 21,000 |
Investment cost and ending fair values for 20X1 and 20X2:
| 20X1 | 20X2 | |
| Cost | 100,000 | 100,000 |
| Fair value | 110,000 | 134,000 |
| Total gain | 10,000 | 34,000 |
20X1 income statement information:
| Sales | 1,670,200 |
| Expenses | 1,536,600 |
What is net income for 20X1 assuming the investment is short-term?
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Modern Auditing Study Guide
Authors: Walter G. Kell
4th Edition
0471619434, 978-0471619437
