21 On January 1, 2020, Balloon Ltd. decided to discontinue its plastics making division. The division, considered a reportable segment, was sold on June 1, 2020. Division assets with a carrying value of $812,500 were sold for $625,000. Operating income from January 1 to May 31 for the division was $62,500. Ignoring taxes, what amount should be reported on Balloon’s income statement for the year ended December 31, 2020, under the caption "discontinued operations"? Select one: a. $250,000 gain b. $62,500 gain c. $187,500 loss d. $125,000 loss
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21
On January 1, 2020, Balloon Ltd. decided to discontinue its plastics making division. The division, considered a reportable segment, was sold on June 1, 2020. Division assets with a carrying value of $812,500 were sold for $625,000. Operating income from January 1 to May 31 for the division was $62,500. Ignoring taxes, what amount should be reported on Balloon’s income statement for the year ended December 31, 2020, under the caption "discontinued operations"?

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- The ledger of Starship Corporation at December 31, 2020, contains the following summary data. Net Sales $1,700,000 Selling expenses 100,000 Other revenues and gains 20,000 Cost of goods sold 900,000 Administrative expenses 200,000 Other expenses and losses 30,000 Your analysis reveals the following additional information that is not included in the above data. The entire laser division was discontinued on August 31. The income from operations for this division before income taxes was $70,000. The laser division was sold at a loss of $50,000 before income taxes. The company had an unrealized gain on available-for-sale securities of $80,000 before income taxes for the year. The income tax rate on all items is 30%. REQUIRED: Prepare a statement of comprehensive income for the year ended December 31, 2020.For its fiscal year ending December 31, 2020, Denver Limited reports the following partial data shown below. Income before income taxes $ 600,000 Income tax expense 180,000 Income before discontinued operations 420,000 Loss on discontinued division 200,000 Net income $ 220,000 The loss on discontinued division consists of $90,000 loss from operations of the division and $110,000 loss on disposal of the division. The income tax rate is 30% on all items. Identify all errors in the above report (Hint: there are three errors. Show your calculation. Do not show your excel worksheet),On November 1, 2019, Woods Company announced its plans to sell its subsidiary, Williams Division (a major strategic component of the company). By December 31, 2019, Woods had not sold Williams Division and so it classifies the division as held for sale. During 2019, Woods recorded the following revenues and expenses for Williams Division and the remainder of the company: Williams Division Remainder of Company Sales revenue $170,000 $950,000 Cost of goods sold 119,000 560,000 Operating expenses 42,000 190,000 Woods is subject to a 30% income tax rate. On December 31, 2019, the net book value of Williams Division is $500,000, consisting of assets of $910,000 and liabilities of $410,000. On this date, Woods estimates that the fair value of Williams Division is $420,000. The company had 50,000 shares of common stock outstanding during all of 2019. Instructions: 1. Prepare the journal entry on December 31, 2019, to record the pretax loss on…
- The following information is related to Crane Company for 2020. Retained earnings balance, January 1, 2020 $882,000 Sales Revenue 22,500,000 Cost of goods sold 14,400,000 Interest revenue 63,000 Selling and administrative expenses 4,230,000 Write-off of goodwill 738,000 Income taxes for 2020 1,119,600 Gain on the sale of investments 99,000 Loss due to flood damage 351,000 Loss on the disposition of the wholesale division (net of tax) 396,000 Loss on operations of the wholesale division (net of tax) 81,000 Dividends declared on common stock 225,000 Dividends declared on preferred stock 72,000 Crane Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Crane sold the wholesale operations to Rogers Company. During 2020, there were 500,000 shares of common stock outstanding all year. (a1) Prepare a…Presented below are the condensed income statement of Ku Co. for the years ended December 31, 2020 and 2019: 2020 2019 Sales $500,000 $490,000 Cost of Goods Sold $335,000 $330,000 Gross Income $165,000 $160,000 Operating Expenses $67,500 $65,000 Operating Income $97,500 $95,000 Gain on sale of division $20,000 0 Net income before income tax $117,500 $95,000 Income tax expense (35%) $41,125 $33,250 Net Income $76,375 $61,750 On October 10, 2020, Renegade entered into an agreement to sell the assets of one of its geographical segments. The geographical segment comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the company. The segment was sold on December 31, 2020, for $175,000. The book value of the segment's assets was $155,000. The segment's contribution to Renegades' operating income before tax for each year was as follows: 2020 11,375 loss 2019 8,125 income Assume…The following information is related to Sheridan Company for 2020. Retained earnings balance, January 1, 2020 $999,600 Sales Revenue 25,500,000 Cost of goods sold 16,320,000 Interest revenue 71,400 Selling and administrative expenses 4,794,000 Write-off of goodwill 836,400 Income taxes for 2020 1,268,880 Gain on the sale of investments 112,200 Loss due to flood damage 397,800 Loss on the disposition of the wholesale division (net of tax) 448,800 Loss on operations of the wholesale division (net of tax) 91,800 Dividends declared on common stock 255,000 Dividends declared on preferred stock 81,600 Sheridan Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Sheridan sold the wholesale operations to Rogers Company. During 2020, there were 500,000 shares of common stock outstanding all year. (a1) Prepare a…
- The following information is related to Nash Company for 2020. Retained earnings balance, January 1, 2020 $901,600 Sales Revenue 23,000,000 Cost of goods sold 14,720,000 Interest revenue 64,400 Selling and administrative expenses 4,324,000 Write-off of goodwill 754,400 Income taxes for 2020 1,144,480 Gain on the sale of investments 101,200 Loss due to flood damage 358,800 Loss on the disposition of the wholesale division (net of tax) 404,800 Loss on operations of the wholesale division (net of tax) 82,800 Dividends declared on common stock 230,000 Dividends declared on preferred stock 73,600 Nash Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Nash sold the wholesale operations to Rogers Company. During 2020, there were 500,000 shares of common stock outstanding all year. (a1) New attempt is in…The following information is related to Dickinson Company for 2020. Retained earnings balance, January 1, 2020 $ 980,000 Sales revenue 25,000,000 Cost of goods sold 16,000,000 Interest revenue 70,000 Selling and administrative expenses 4,700,000 Write-off of goodwill 820,000 Income taxes for 2020 1,244,000 Gain on the sale of investments 110,000 Loss due to flood damage 390,000 Loss on the disposition of the wholesale division (net of tax) 440,000 Loss on operations of the wholesale division (net of tax) 90,000 Dividends declared on common stock 250,000 Dividends declared on preferred stock 80,000 Dickinson Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Dickinson sold the wholesale operations to Rogers Company. During 2020, there were 500,000 shares of common stock outstanding all year. Instructions Prepare a multiple-step income statement…The following pretax amounts pertain to Han Ae Sook Company for the year ended December 31, 2020: Sales -P800,000; Distribution and administrative costs – P84,000; Other income - P40,000; Interest expense - P4,000; Cost of goods sold – P480,000; Correction of prior period error (credit) – P16,000; Discontinued operations (debit) – P40,000; Cumulative effect of change in accounting policy (credit) – P28,000; Retained earnings, January 1 (not restated) – P160,000; Dividends declared – P12,000; Income tax rate is 30%. How much retained earnings would be shown on December 31, 2020 statement of financial position? А. Р310,400 В. Р335,600 C. P341,200 D. P344,800
- Duke Company’s records show the following account balances at December 31, 2021: Sales revenue $ 18,600,000 Cost of goods sold 10,800,000 General and administrative expense 1,180,000 Selling expense 680,000 Interest expense 880,000 Income tax expense has not yet been determined. The following events also occurred during 2021. All transactions are material in amount. $480,000 in restructuring costs were incurred in connection with plant closings. Inventory costing $580,000 was written off as obsolete. Material losses of this type are considered to be unusual. It was discovered that depreciation expense for 2020 was understated by $68,000 due to a mathematical error. The company experienced a negative foreign currency translation adjustment of $380,000 and had an unrealized gain on debt securities of $360,000. Required:Prepare a single, continuous multiple-step statement of comprehensive income for 2021. The company’s effective tax rate on all…Duke Company’s records show the following account balances at December 31, 2021: Sales revenue $ 17,600,000 Cost of goods sold 10,300,000 General and administrative expense 1,130,000 Selling expense 630,000 Interest expense 830,000 Income tax expense has not yet been determined. The following events also occurred during 2021. All transactions are material in amount. $430,000 in restructuring costs were incurred in connection with plant closings. Inventory costing $530,000 was written off as obsolete. Material losses of this type are considered to be unusual. It was discovered that depreciation expense for 2020 was understated by $63,000 due to a mathematical error. The company experienced a negative foreign currency translation adjustment of $330,000 and had an unrealized gain on debt securities of $310,000. Required:Prepare a single, continuous multiple-step statement of comprehensive income for 2021. The company’s effective tax rate on all…Accounting The before-tax income for Environmentalists Corp. for 2021 was $295,000; for 2020, it was $320.000. You have spent considerable time reviewing the accounts and have noted the following: Sales for 2020 included $72,000 that had been received in cash during 202O, but for which the related products were delivered in 202 Performance was considered complete on delivery. Ending inventory on December 31, 2021, was understated by $6,500. The December 31, 2020 ending inventory was overstated by $3,300. In January 2021, Environmentalists reviewed its recycling machinery. The machine was purchased in January 2018 for $250,000 with a residual value of $30,000 and a useful life of 10 years. Environmentalists has determined the remaining useful life is now 5 years with no residual value. Ordinary repairs to equipment had been charged in error to the Equipment account during 2021,2020 and 2019. In total, repairs in the amount of $7,500 in 2021, $8,400 in 2020 and $9,000 in 2019 were…











