Addison Corporation is currently going through a Chapter 11 bankruptcy. The company has the following account balances for thecurrent year.DebitCredit$ 45,000232,000Advertising expenseCost of goods soldDepreciation expenseInterest expense43,0009,000Interest revenue$ 43,000Loss on closing of branch as part of reorganization130,00092,00037,000Professional feesRent expenseRevenues614,000Salaries expense91,000Prepare an income statement for this organization. The effective tax rate is 20 percent (realization of any tax benefits is anticipated).(Negative amounts under "Reorganization items" should be indicated by a minus sign. All other amounts should be entered aspositive.)ADDISON CORPORATIONIncome StatementCosts and expenses:< Prev4 of 4NextMacBook Pro ADDISON CORPORATIONIncome StatementCosts and expenses:Earnings before reorganization items and tax effects$4Reorganization items:0.0.%24%24%24

Income statement: The financial statement which reports revenues and expenses from business…

Answered: Addison Corporation is currently going…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Below is the statement of realization and liquidation of Alex Corporation, which is under receivership for the month ended July 31, 20x5:AssetsAssets acquired: Assets realized:Accounts receivable P20,000 Investment at fair value P24,000Assets to be realized: Assets not realized:Investment at fair value 32,000 Accounts receivable 10,000Accounts receivable 76,000 Merchandise inventory 30,000Merchandise inventory 40,000LiabilitiesLiabilities liquidated: Liabilities to be liquidated:Accounts payable P56,000 Accounts payable P90,000Liabilities not liquidated: Liabilities assumed:Accounts payable 20,000 Accounts payable 16,000Accrued expenses 4,000Supplementary Items Supplementary Expenses Supplementary IncomePurchases P3,000 Sales on account P12,000Expenses 15,000 Cash sales 40,000Interest income 4,000QUESTIONS:9. What is the net income or loss for the period? ______________
Big Corp. has been undergoing liquidation since December 1, 2020. As of July 31, 2021, the following data are available: P1,500,000 Liabilities not liquidated Liabilities to be liquidated P1,700,000 Assets acquired Assets realized P2,400,000 P2,250,000 Assets not realized P1,375,000 Liabilities assumed P2,625,000 Assets to be realized P2,750,000 Liabilities liquidated P1,750,000 Supplementary charges/debits P2,750,000 Supplementary credits P3,800,000 Answer the following questions: (answers can be repeated) Compute the ending cash balance of cash account (as of July 31, 2021) assuming that Choose... common stock and deficits are P2,750,000 and P750,000, respectively. What is the net gain/(loss) of Big Corp. from the liquidation? Choose...
Down Dog Corporation filed a petition for bankruptcy on June 30, 2014. Data relevant to its financial position as of this date are: Cash Accounts receivable-net Inventories Equipment-net Total assets Accounts payable Rent payable Wages payable Note payable plus accrued interest Capital stock Retained earnings (deficit) Total liabilities and equity Requirements: Book Value P3,000 72,000 60,000 165,000 P300,000 P72,000 21,000 45,000 96,000 180,000 (120.000) P300.000 Estimated Net Realizable Values P3,000 48,000 72,000 87,000 P210,000 1. Prepare a statement of affairs assuming that the note payable and interest are secured by a mortgage on the equipment. 2. Estimate the amount that will be paid to each class of claims if priority liquidation expenses, including trustee fees, are P24,000 and estimated net realizable values are realized.
Straightarm Inc. is a calendar-year corporation. Its financial statements for the years ended 12/31/24 and 12/31/25 contained the following errors: Ending inventory Depreciation expense . Select one: 2024 • Failed to record Unearned Revenue at 12/31/25: $7,000 Straightarm declared a cash dividend of $11,000 on 12/31/25. No journal entry was made in 2025. The dividend was paid on 1/3/26; Straightarm debited Retained Earnings and credited Cash. 12/31/26 Retained Earnings is in error by: h a. No error $15,000 understatement 6,000 understatement Ob. $18,000 OC. $12,000 2025 $24,000 overstatement 12,000 understatement 1 O + 8
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PROBLEM L: MOVING ON Co. has been undergoing liquidation since January 1. As of March 31, its condensed statement of realization and liquidation is presented below. Assets: Assets to be realized Assets acquired Assets realized P206,250 112,500 180,000 Assets not realized 206,250 Liabilities: Liabilities liquidated Liabilities not liquidated 281,250 255,000 337,500 Liabilities to be liquidated Liabilities assumed 243,750 Revenue and expenses: Supplementary charges Supplementary credīts 468,750 420,000 16. The net gain (loss) for the three-month period ending March 31 is (25,000) (63,750) 63,750 А. С. В. 25,000 D.
Nissan Corporation is undergoing liquidation. On January 1, 2020 its Statement of Financial Position showed the following accounts: ASSETS Cash P 150,000 Accounts Receivables-net 290,600 Inventory 50,000 Prepaid Expenses 10,400 Building 380,000 Goodwill 80,000 TOTAL P 961.000 LIABILITIES AND EQUITY Salaries Payable P 85,000 Accounts Payable 120,700 Mortgages Payable 428,000 Loan Payable 130,000 Notes Payable 84,300 Ordinary Shares 170,000 Deficit (57,000) TOTAL P961.000 The mortgage payable is secured by the Building having a realizable value of P400,000. Accounts Payable amounting to P75,000 is secured by receivables amounting to P90,600 (P9,900 of which is uncollectible). The balance of receivables which has a realizable value of P187,500 is used to secure the loan payable. Inventory has a realizable value of P41,200. In addition to recorded liabilities are: accrued interest on mortgage payable amounting to P4,280,…
Nissan Corporation is undergoing liquidation. On January 1, 2020 its Statement of Financial Position showed the following accounts: ASSETS Cash P 150,000 Accounts Receivables-net 290,600 Inventory 50,000 Prepaid Expenses 10,400 Building 380,000 Goodwill 80,000 TOTAL P 961.000 LIABILITIES AND EQUITY Salaries Payable P 85,000 Accounts Payable 120,700 Mortgages Payable 428,000 Loan Payable 130,000 Notes Payable 84,300 Ordinary Shares 170,000 Deficit (57,000) TOTAL P961.000 The mortgage payable is secured by the Building having a realizable value of P400,000. Accounts Payable amounting to P75,000 is secured by receivables amounting to P90,600 (P9,900 of which is uncollectible). The balance of receivables which has a realizable value of P187,500 is used to secure the loan payable. Inventory has a realizable value of P41,200. In addition to recorded liabilities are: accrued interest on mortgage payable amounting to P4,280,…
Blossom Inc. is a calendar-year corporation. Its financial statements for the years 2022 and 2021 contained errors as follows: 2022 2021 Ending Inventory $9100 overstated $18100 overstated Depreciation Expense $6100 understated $13600 overstated O $7600 overstated O $15200 overstated O $10600 overstated O $3000 understated Assume that the proper correcting entries were made at December 31, 2021. By how much will 2022 income before taxes be overstated or understated?
Presented below is information related to Donaldson Corp., (a publicly traded company) for the year 2020. Net sales Cost of goods sold Selling expenses Administrative expenses Dividend revenue Interest revenue Interest expense Write-off of goodwill due to impairment Depreciation expense omitted in 2019 Dividends declared $1,950,000 1,200,000 95,000 70,000 30,000 20,000 45,000 75,000 105,000 100,000 Net loss associated with the closing of the company's Mining operation that is considered a distinct segment of The business 220,000 Federal tax rate of 35% on all items Instructions Prepare a multiple-step income statement for 2020. Assume the 200,000 shares of common stock were outstanding during 2020.
Because of its inability to pay its debts, the KDC Manufacturing Company has been forced into bankruptcy as of June 30, 2021. The Statement of Financial Position on that date shows. Cash Accounts Receivable Notes Receivable Inventories Prepaid Expenses Land and Buildings Equipment ASSETS TOTAL c. 48% d. 50% 5,665 Accounts Payable 39,350 Notes Payable - BPI 18,500 Notes Payable - Suppliers 87,850 Accrued Wages 950 Accrued Taxes 61,250 Mortgage Bond Payable LIABILITIES and EQUITY 48,800 Common Stock - P100 par a. 4,355 b. 4,550 c. 3,120 d. 6,500 P262,365 TOTAL 15. The estimated loss on asset disposition is a. 29,240 b. 112,740 c. 111,790 d. 82,550 16. What is the estimated gain on asset disposition? a. 33,750 b. 41,000 c. 34,700 d. 0 17. The expected recovery percentage is: a. 67% b. 70% Retained Earnings 52,500 15,000 51,250 Additional Information: Only P16,110 of Accounts Receivable and P12,500 of Notes Receivable are expected to be collectible. The good notes are pledged to Bank of…
Hudson, Inc. is a calendar-year corporation. Its financial statements for the years 2018 and 2017 contained errors as follows: 2018 2017 Ending inventory $9,000 overstated $24,000 overstated Depreciation expense $6,000 understated $18,000 overstated Reference: Ref 8-5 Assume that no correcting entries were made at December 31, 2017, or December 31, 2018 and that no additional errors occurred in 2019. Ignoring income taxes, by how much will working capital at December 31, 2019 be overstated or understated? A. $0 B. $15,000 understated C. $ 6,000 overstated D. $ 6,000 understated

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