Reformulating Balance Sheet and Income Statement for an Asset Disposal

In $2019,$ USP Delivery recorded an impairment loss of $$462,000$ on its corporate plane. We wish to reformulate the company$$s income statement and balance sheet under the assumption that the plane had been used for the prior five years$$see Analyst Adjustments $6\mathrm{.}2$ for guidance. The company$$s tax rate is $25\%.$

a$.$ For the income statement, identify with numbers the adjustments for each of the five years $2015-2019$ for:

Loss on disposal

Depreciation

Tax expense

Net income

Use a negative sign with your answer to indicate an adjustment decreases the account.

Income Statement Adjustments $20152016201720182019$

Loss on disposal $($reversal$)$ Answer

$(462,000)$

Tax Expense $($reversal$)$ Answer

$115,500$

Net Income $($reversal$)$ Answer

$346,500$

Depreciation Answer

$92,400$

Answer

$92,400$

Answer

$92,400$

Answer

$92,400$

Answer

$92,400$

Tax Expense Answer

$(23,100)$

Answer

$(23,100)$

Answer

$(23,100)$

Answer

$(23,100)$

Answer

$(23,100)$

Net income $($adjustment$)$ Answer

$(69,300)$

Answer

$(69,300)$

Answer

$(69,300)$

Answer

$(69,300)$

Answer

$(69,300)$

Total net income $($reversal $+$ adjustment$)$ Answer

$(69,300)$

Answer

$(69,300)$

Answer

$(69,300)$

Answer

$(69,300)$

Answer

$277,200$

b$.$ For the balance sheet, identify with numbers the adjustments for each of the five years $2015-2019$ for:

Accumulated depreciation

Deferred tax

Retained earnings

Use a negative sign with your answer to indicate an adjustment decreases the account.