Score for this attempt:4.15out of 10

Submitted May 31 at 3:38pm

This attempt took 520 minutes.

Question 1

1.66/ 1.66pts

Pitchfork Corporation is preparing its 2018 financial statements.Income fromContinuingOperations (ICO) for 2018 was determined to be $1,400,000, but upon further review, Pitchfork's accountant is not certain this number is accurate.The Company has a corporate tax rate of 30%.Additionally, the company reports one year of financial data on the face of the financial statements.Use the following information to determine the adjustments, if any, tocorrectlyreport Income From Continuing Operations.

1.During 2018, Pitchfork experienced a labor strike which closed down the operations of one of its plants for an entire month.The pretax loss of $680,000 was excluded when determining Income from Continuing Operations because the bookkeeper was uncertain if this event qualified for discontinued operations, although the plant was re-opened after the strike was settled and did not represent a strategic shift in the on-going operations for Pitchfork.Additionally, this plant did not qualify as a component of Pitchfork.

Determine the adjustment (if any) to correct Income from Continuing Operations (ICO) for the labor strike.$[Blank_1]

*If you need to increase ICO, enter your answer as a positive number; if you need to decrease ICO, enter your answer as a negative number using () parenthesis.If you determine that Pitchfork treated the labor strike correctly and that ICO does not need to be adjusted, enter NE for No Effect.You do not need to record your answer using $ signs or commas.

Partial

Question 2

0.83/ 1.66pts

Continuing with the information presented in #1 above, Pitchfork has ICO of $1,400,000 and a corporate tax rate of 30%.Determine if ICO should be adjusted based on the following information:

On May 1,2017, Pitchfork received $180,000 cash in advance for consulting services to be performed evenly over the next three years.When Pitchfork recorded the transaction, the bookkeeper creditedService Revenue.No adjusting or correcting entries were made although Pitchfork has fulfilled their obligation to perform consulting services as stipulated in the contract.Pitchfork did not realize the error untilafterthe 2018 Income from Continuing Operations was calculated at $1,400,000.

a.Determine the adjustment for Service Revenue affecting ICO for 2018:$________

b.Determine the effect of this error on Retained Earnings (if any):$______________

*If you need to increase ICO, enter your answer as a positive number; if you need to decrease ICO, enter your answer as a negative number using () parenthesis.If you determine that Pitchfork treated the transaction correctly and that ICO does not need to be adjusted, enter NE for No Effect.You do not need to record your answer using $ signs or commas.

Answer 1:

42000

Answer 2:

(84000)

Incorrect

Question 3

0/ 1.67pts

Continuing with the information presented in #1 above, Pitchfork has ICO of $1,400,000 and a corporate tax rate of 30%.Determine if ICO should be adjusted based on the following information:

Pitchfork purchased a computer system for $260,000 on January 1, 2015 with an estimated 8 year useful life and $20,000 salvage value.Pitchfork uses the straight-line method to depreciate this class of asset.Near the end of 2018, the company determined it was appropriate to change the depreciation method of this asset to the Double-Declining-Balance method and wanted to apply the DDB method for 2018.The bookkeeper was unaware of this change and already calculated 2018 ICO using the straight-line method.

Adjustment (if any) for Depreciation Expense (2018):$_______________________

*If you need to increase ICO, enter your answer as a positive number; if you need to decrease ICO, enter your answer as a negative number using () parenthesis.If you determine that ABC treated the transaction correctly and that ICO does not need to be adjusted, enter NE for No Effect.You do not need to record your answer using $ signs or commas.

Remember, this is the difference between what the bookkeeper actually recorded for Depr. Exp in 2018 using the S-L method, and what should have been reported for Depr. Exp in 2018 using the DDB method.To change depreciation methods, determine the BV as of Jan 1, 2018, then use the following DDB formula:2/#yrs remain x [BV at Jan 1, 2018]

Also, when you calculate the difference between Depr Exp using S-L and DDB, remember this is pre-tax.If you need to correct I.C.O., this is AFTER TAX, therefore any adjustments to it must be after tax as well.

Incorrect

Question 4

0/ 1.66pts

Continuing with the information presented in #1 above, Pitchfork has ICO of $1,400,000 and a corporate tax rate of 30%.Determine if ICO should be adjusted based on the following information:

Over the past four years, Pitchfork has estimated bad debts based on 4% of accounts receivable.In 2018, after reviewing their major client's credit worthiness, they decided to change this estimate to 3%.As of December 31st, ABC reported their accounts receivable at $1,160,000, and the Balance Before Adjustment in the Allowance for Doubtful Accounts was $10,100 (cr).

The $1,400,000 of ICO had been calculated after recording Bad Debt Expense using the old estimate of 4% for 2018.

Adjustment for Bad Debt Expense for 2018:$[Blank_5]

*If you need to increase ICO, enter your answer as a positive number; if you need to decrease ICO, enter your answer as a negative number using () parenthesis.If you determine that Pitchfork treated the transaction correctly and that ICO does not need to be adjusted, enter NE for No Effect.You do not need to record your answer using $ signs or commas.

Question 5

1.66/ 1.66pts

Continuing with the information presented in #1 above, Pitchfork has ICO of $1,400,000 and a tax rate of 30%.Use the following information to determine if ICO should be corrected.

In 2018, Pitchfork had a foreign currency transaction gain on certain inventory purchases with overseas suppliers in the amount of $174,000 (pre-tax) and an unrealized loss (pre-tax) on pension adjustments of $278,000.Neither of these events were included in determining the $1,400,000 ICO.

a.Adjustment to 2018 ICO for the Foreign Currency Transaction Gain:$

b.Adjustment to 2018 ICO for the Pension Adjustment:$

*If you need to increase ICO, enter your answer as a positive number; if you need to decrease ICO, enter your answer as a negative number using () parenthesis.If you determine that Pitchfork treated the transaction correctly and that ICO does not need to be adjusted, enter NE for No Effect.You do not need to record your answer using $ signs or commas.

Answer 1:

121800

Answer 2:

NE

Incorrect

Question 6

0/ 1.69pts

Using the adjustments you made to Income From Continuing Operations in questions 1-5 above, determine theCORRECTED ICOfor 2018:$_____________________