At the beginning of the year, Loxus Corporation had E & P of $205,000. On March 30, Teal sold an asset at a loss of $201,000. For the calendar year, Loxus incurred a deficit in current E & P of $300,000, which includes the $210,000 loss on the sale of the asset. If Loxu made a distribution of $50,000 to its sole shareholder on April 1 and the shareholder had a basis in her stock of $70,000, how will the shareholder be taxed?
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At the beginning of the year, Loxus Corporation had E & P of $205,000. On March 30, Teal sold an asset at a loss of $201,000. For the calendar year, Loxus incurred a deficit in current E & P of $300,000, which includes the $210,000 loss on the sale of the asset. If Loxu made a distribution of $50,000 to its sole shareholder on April 1 and the shareholder had a basis in her stock of $70,000, how will the shareholder be taxed?
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- On December 31, 2021, the end of the fiscal year, California Microtech Corporation completed the sale of its semiconductor business for $10 million. The semiconductor business segment qualifies as a component of the entity according to GAAP. The book value of the assets of the segment was $8 million. The loss from operations of the segment during 2021 was $3.6 million. Pretax income from continuing operations for the year totaled $5.8 million. The income tax rate is 25%. Prepare the lower portion of the 2021 income statement beginning with income from continuing operations before income taxes. Ignore EPS disclosures. (Amounts to be deducted and negative amounts should be indicated with a minus sign. Enter your answers in whole dollars and not in millions.) CALIFORNIA MICROTECH CORPORATION Partial Income Statement For the Year Ended December 31, 2021 Income from continuing operations before income taxes Income tax expense Income from continuing operations Discontinued operations: Loss…On December 31, 2021, the end of the fiscal year, California Microtech Corporation completed the sale of its semiconductor business for $10 million. The semiconductor business segment qualifies as a component of the entity according to GAAP. The book value of the assets of the segment was $8 million. The loss from operations of the segment during 2021 was $3.6 million. Pretax income from continuing operations for the year totaled $5.8 million. The income tax rate is 25%. Prepare the lower portion of the 2021 income statement beginning with income from continuing operations before income taxes. Ignore EPS disclosures.At the start of the current year, SBC Corp. purchased 30% of Sky Tech Inc. for $45 million. At the time of purchase, the carrying value of Sky Tech's net assets was $75 million. The fair value of Sky Tech's depreciable assets was $15 million in excess of their book value. For this year, Sky Tech reported a net income of $75 million and declared and paid $15 million in dividends.The total amount of additional depreciation to be recognized by SBC over the remaining life of the assets is:
- At the start of the current year, SBC Corp. purchased 30% of Sky Tech Inc. for $51 million. At the time of purchase, the carrying value of Sky Tech's net assets was $80 million. The fair value of Sky Tech's depreciable assets was $20 million in excess of their book value. For this year, Sky Tech reported a net income of $80 million and declared and paid $20 million in dividends. The total amount of additional depreciation to be recognized by SBC over the remaining life of the assets is: Multiple Choice O $6.0 million. $20 million. $30 million. None of these answer choices are correct.On July 1, Zamora Inc. agreed to sell the assets of its Golfright Division to Benito Inc. for $71 million. The following additional facts pertain to the transaction: • The Golfrignt Division qualifies as a component of the entity according to GAAP regarding discontinued operations. • The book value of the Golfright's assets totaled $45 million on the date of the sale. Golfright's operating income was a pre-tax loss of $160 million in 2020. • Zamora's income tax rate is 40%. Suppose that the Golfright Division's assets had not been sold by December 31, 2020, but were considered held for sale. Assume that the fair value of these assets at December 31 was $71 million. Calculate the amount of loss from discontinued operations Zamora Inc. will report in the income statement for 2020. (Please input answer without the millions, i.e. 100 million would be entered as 100)On December 31, 2021, the end of the fiscal year, Revolutionary Industries completed the sale of it's robotics business for $9 million. The robotics business segment qualifies as a component of the entity according to GAAP. The book value of the assets of the segment was $7 million. The income from opertations of the segment during 2021 was $4 million. Pretax income from continuing operations for the year totaled $12 million. The income tax rate is 25%. prepare the lower protion of the 2021 income statment beginning with income from continuing operations before income taxes. Ignore EPS disclosures. What is the income from discontinued operations?
- Twilight Co. paid $2,800,000 to acquire all of the common stock of Aurna Corp. on January 1, 2022. Aurna's reported earnings for 2022 totaled $512,000, and it paid $160,000 in dividends during the year. The amortization of allocations related to the investment was $28,000. Twilight's net income, not including any income from this investment, was $3,310,000, and it paid dividends of $930,000. On the consolidated financial statements for 2022, what amount should be shown for consolidated dividends? OL $160,000 O. $902,000 O.$930,000 OV.$950,000 OV. $1,090,000Marigold Corporation purchased 440 shares of Sherman Inc. common stock for $14,400 (Marigold does not have significant influence). During the year, Sherman paid a cash dividend of $3.25 per share. At year-end, Sherman stock was selling for $37.00 per share.Prepare Marigold's journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment. (Assume a zero balance in the Fair Value Adjustment account.)McCannon Inc. has been in operations for four years. The first three years it accumulated operating losses of $82400. In the fourth year it earned $30900 in operating income. In the current year, its fifth year, it had $20600 of operating income and $5150 of dividend income from Irving Inc. McCannon owns 15% of Irving Inc. What is McCannon’s taxable income in the fifth year, assuming the 80% taxable income limit applies for all the years? [For your answer, please ignore the dollar sign and the comma.]
- Wildhorse Corp. has 150,620 shares of common stock outstanding. In 2020, the company reports income from continuing operations before income tax of $ 1,221,000. Additional transactions not considered in the $ 1,221,000 are as follows. 1. In 2020, Wildhorse Corp. sold equipment for $ 35,800. The machine had originally cost $ 84,300 and had accumulated depreciation of $ 33,900. The gain or loss is considered non-recurring. 2. The company discontinued operations of one of its subsidiaries during the current year at a loss of $ 191,200 before taxes. Assume that this transaction meets the criteria for discontinued operations. The loss from operations of the discontinued subsidiary was $ 91,100 before taxes; the loss from disposal of the subsidiary was $ 100,100 before taxes. 3. An internal audit discovered that amortization of intangible assets was understated by $ 39,300 (net of tax) in a prior period. The amount was charged against retained earnings. 4. The company…Wade Corp. has 150,000 shares of common stock outstanding. In 2020, the company reports income from continuing operations before income tax of $1,210,000. Additional transactions not considered in the $1,210,000 are as follows. 1. In 2020, Wade Corp. sold equipment for $40,000. The machine had originally cost $80,000 and had accumulated depreciation of $30,000. The gain or loss is considered non-recurring. 2. The company discontinued operations of one of its subsidiaries during the current year at a loss of $190,000 before taxes. Assume that this transaction meets the criteria for discontinued operations. The loss from operations of the discontinued subsidiary was $90,000 before taxes; the loss from disposal of the subsidiary was $100,000 before taxes. 3. An internal audit discovered that amortization of intangible assets was understated by $35,000 (net of tax) in a prior period. The amount was charged against retained earnings. 4. The company recorded a non-recurring gain…On August 1, 2020, Oriole Corporation purchased 20% of the outstanding voting shares in WLT Corporation for $1,230,000. At the time of purchase, WLT’s net assets were undervalued by $72,200 and had a remaining useful life of 12 years. Both companies had a December 31 year-end. At the end of 2020, WLT reported a net income of $329,000. Also, on December 31, 2020, the fair value of the investment in WLT shares was $1,353,000. On January 10, 2021, WLT paid a cash dividend. Oriole’s ownership entitles it to $18,000 of the dividend.Prepare the journal entries on the books of Oriole Corporation to record the transactions described above, assuming that the 20% interest in WLT does not represent significant influence, and that Oriole elected to account for its investment following the fair value through net income (FV-NI) model. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If…