Homework Answers
Solution:
a) As 37million of gain was unrealised and rate of taxation is 30% therefore the shareholder's equity is understated by 25.90 million
b) Report a current year change decrease net income by $1,960,000 = 70% of 4million - 2.8 million
c) on $5,90,000 after tax the the net income will be 60% of 5,90,000 = $3,54,000 by this amout the net income is understated.
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A company failed to record unrealized gains of $37 million on its debt...
Capacitantes #3 EI estudiante re se presentan los cambios en principios contables en los estados financieros....
Capacitantes #3 EI estudiante re se presentan los cambios en principios contables en los estados financieros. SELECT THE BEST ANSWER (Shows computations are required) 1. A company switched from the cash basis to the accrual basis for recognizing warranty expense even though the warranty liability was always material. The unrecorded liability for warranties was $2 million at the beginning of the year. Its tax rate is 30%. The company booked a year- end warranty liability of $3 million. As a...
1. 2. In the previous year, a firm failed to record premium amortization of $41,900 and...
1.
2.
In the previous year, a firm failed to record premium amortization of $41,900 and $29,600, respectively, on its bonds payable and held to maturity bond Investments. These errors affect both Income before tax and taxable income. The firm's tax rate is 30%. As a result of this error, net Income was: Multiple Choice O Overstated by $8.610. O Understated by $33.290. O Understated by $8.610. O Overstated by $33.290. Williams-Santana, Inc., is a manufacturer of high-tech industrial parts...
1. Marigold Corp. estimates its annual warranty expense as 3% of annual net sales. The following...
1. Marigold Corp. estimates its annual warranty expense as 3% of
annual net sales. The following data relate to the calendar year
2021:
Net sales
$1506000
Warranty liability account
Balance, Dec. 31, 2020
$13000
debit before adjustment
Balance, Dec. 31, 2021
32180
credit after adjustment
Which one of the following entries was made to record the 2021
estimated warranty expense?
a
Warranty Expense
32180
Warranty Liability
32180
b
Warranty Expense
37635
Retained Earnings (prior-period adjustment)
7545
Warranty Liability
45180
c...
1. 2. 3. In 2018, Internal auditors discovered that Fay, Inc., had debited an expense account for the $3,900,000 cost...
1.
2.
3.
In 2018, Internal auditors discovered that Fay, Inc., had debited an expense account for the $3,900,000 cost of a machine purchased on January 1, 2015. The machine's useful life was expected to be 20 years with no residual value. Straight-line depreciation is used by Fay. The Journal entry to correct the error will include a credit to accumulated depreciation of Multiple Choice 0 $585.000 O $195,000 O $3.900.000 o $390,000 Berkshire Inc. uses a periodic Inventory system....
3. At January 1, 2018, HD had a deferred tax asset of 590 million with no...
3. At January 1, 2018, HD had a deferred tax asset of 590 million with no valuation allowance. At December 31, 2018, the account balances of HD Services showed a deferred tax asset ofS120 million befre assessing the need for a valuation allowance and income taxes payable of 580 million. HD determined that it was more likely that 30% of the deferred tax asset ultimately would not be realized. HD made no estimmated tat payments during 2018. What amount should...
AC313 Zygo Corp. granted options for 1 million shares of its $1 par common stock at...
AC313
Zygo Corp. granted options for 1 million shares of its $1 par common stock at the beginning of the current year. The exercise price is $35 per share, which was also the market value of the stock on the grant date. The fair value of the options was estimated at $7.50 per option. If the options have a vesting period of five years, what would be the balance in "Paid-in Capital-Stock Options" three years after the grant date? Multiple...
1. 2. 3. In preparing its cash flow statement for the year ended December 31, 2018,...
1.
2.
3.
In preparing its cash flow statement for the year ended December 31, 2018, Green Co. gathered the following data: $12,900 Gain on sale of land Proceeds from sale of land 21,800 Purchase of Black, Inc., bonds (face value $230,000) 363,000 Amortization of bond discount 4,600 Cash dividends declared 98,000 Cash dividends paid 72,000 Proceeds from sales of Green Co. common stock 155,000 In its December 31, 2018, statement of cash flows, what amount should Green report as...
2 A company had net sales of $520,000, total sales of $670,000, and an average accounts...
2
A company had net sales of $520,000, total sales of $670,000, and an average accounts receivable of $84,000. Its accounts receivable turnover equals: Multiple Choice 0.16 0.13 7.98 O.78 6.19 A company ages its accounts receivables to determine its end of period adjustment for bad debts. At the end of the current year, management estimated that $31,750 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a credit balance...
11C1 1-3) 1 TB MC Qu. 02-54 on September 1, Year 1, Gomez Company... On September...
11C1 1-3) 1 TB MC Qu. 02-54 on September 1, Year 1, Gomez Company... On September 1, Year 1, Gomez Company collected $20,700 in advance from a customer for services to be provided over a one- year period beginning on that date. How much revenue would Gomez Company report related to this contract on its income statement for the year ended December 31, Year 1? How much would the company report as net cash flows from operating activities for Year...
On January 1, Year 2, the Supplies account of Sheldon Company had a balance of $1,200....
On January 1, Year 2, the Supplies account of Sheldon Company had a balance of $1,200. During the year, the company purchased $3,400 of supplies on account and made partial payments totaling $3,000 on those accounts. On December 31, Year 2, Sheldon determined that there were $1,400 of supplies on hand. Which of the following would be reported on Sheldon's Year 2 financial statements? Multiple Choice $1,600 of supplies: $200 of supplies expense $1,400 of supplies: $2,000 of supplies expense...
Capacitantes #3 EI estudiante re se presentan los cambios en principios contables en los estados financieros. SELECT THE BEST ANSWER (Shows computations are required) 1. A company switched from the cash basis to the accrual basis for recognizing warranty expense even though the warranty liability was always material. The unrecorded liability for warranties was $2 million at the beginning of the year. Its tax rate is 30%. The company booked a year- end warranty liability of $3 million. As a...
1.
2.
In the previous year, a firm failed to record premium amortization of $41,900 and $29,600, respectively, on its bonds payable and held to maturity bond Investments. These errors affect both Income before tax and taxable income. The firm's tax rate is 30%. As a result of this error, net Income was: Multiple Choice O Overstated by $8.610. O Understated by $33.290. O Understated by $8.610. O Overstated by $33.290. Williams-Santana, Inc., is a manufacturer of high-tech industrial parts...
1. Marigold Corp. estimates its annual warranty expense as 3% of
annual net sales. The following data relate to the calendar year
2021:
Net sales
$1506000
Warranty liability account
Balance, Dec. 31, 2020
$13000
debit before adjustment
Balance, Dec. 31, 2021
32180
credit after adjustment
Which one of the following entries was made to record the 2021
estimated warranty expense?
a
Warranty Expense
32180
Warranty Liability
32180
b
Warranty Expense
37635
Retained Earnings (prior-period adjustment)
7545
Warranty Liability
45180
c...
1.
2.
3.
In 2018, Internal auditors discovered that Fay, Inc., had debited an expense account for the $3,900,000 cost of a machine purchased on January 1, 2015. The machine's useful life was expected to be 20 years with no residual value. Straight-line depreciation is used by Fay. The Journal entry to correct the error will include a credit to accumulated depreciation of Multiple Choice 0 $585.000 O $195,000 O $3.900.000 o $390,000 Berkshire Inc. uses a periodic Inventory system....
3. At January 1, 2018, HD had a deferred tax asset of 590 million with no valuation allowance. At December 31, 2018, the account balances of HD Services showed a deferred tax asset ofS120 million befre assessing the need for a valuation allowance and income taxes payable of 580 million. HD determined that it was more likely that 30% of the deferred tax asset ultimately would not be realized. HD made no estimmated tat payments during 2018. What amount should...
AC313
Zygo Corp. granted options for 1 million shares of its $1 par common stock at the beginning of the current year. The exercise price is $35 per share, which was also the market value of the stock on the grant date. The fair value of the options was estimated at $7.50 per option. If the options have a vesting period of five years, what would be the balance in "Paid-in Capital-Stock Options" three years after the grant date? Multiple...
1.
2.
3.
In preparing its cash flow statement for the year ended December 31, 2018, Green Co. gathered the following data: $12,900 Gain on sale of land Proceeds from sale of land 21,800 Purchase of Black, Inc., bonds (face value $230,000) 363,000 Amortization of bond discount 4,600 Cash dividends declared 98,000 Cash dividends paid 72,000 Proceeds from sales of Green Co. common stock 155,000 In its December 31, 2018, statement of cash flows, what amount should Green report as...
2
A company had net sales of $520,000, total sales of $670,000, and an average accounts receivable of $84,000. Its accounts receivable turnover equals: Multiple Choice 0.16 0.13 7.98 O.78 6.19 A company ages its accounts receivables to determine its end of period adjustment for bad debts. At the end of the current year, management estimated that $31,750 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a credit balance...
11C1 1-3) 1 TB MC Qu. 02-54 on September 1, Year 1, Gomez Company... On September 1, Year 1, Gomez Company collected $20,700 in advance from a customer for services to be provided over a one- year period beginning on that date. How much revenue would Gomez Company report related to this contract on its income statement for the year ended December 31, Year 1? How much would the company report as net cash flows from operating activities for Year...
On January 1, Year 2, the Supplies account of Sheldon Company had a balance of $1,200. During the year, the company purchased $3,400 of supplies on account and made partial payments totaling $3,000 on those accounts. On December 31, Year 2, Sheldon determined that there were $1,400 of supplies on hand. Which of the following would be reported on Sheldon's Year 2 financial statements? Multiple Choice $1,600 of supplies: $200 of supplies expense $1,400 of supplies: $2,000 of supplies expense...
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