Crane Company reported net income of $470000 for the year ended 12/31/21. Included inthe computation of net income were: depreciation expense, $59000; amortization of apatent, $31000; income from an investment in common stock of Blossom Company,accounted for under the equity method, $47000; and amortization of a bond discount,$11000. Crane also paid an $79000 dividend during the year. The net cash provided byoperating activities would be reported atO $445000.$414000.$335000.O $524000.

Step 1: Net cash provided by operating activities can be calculated in the given situation using the…

Answered: Crane Company reported net income of…

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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This year, Sigma, Incorporated generated $612,000 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held for more than 12 months: Marketable securities This year, Sigma, Incorporated generated $612,000 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held for more than 12 months: Initial Basis Accumulated Depreciation* Sale Price Marketable securities $144,000 $0 $64,000 Production equipment 93,000 76,000 30,000 Business realty: Land 165,000 0 180,000 Building 200,000 58,300 210,000 *Through date of sale. Required: Compute Sigma’s taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses. Recompute taxable income assuming that Sigma sold the securities for $150,000 rather than…
On January 1, 2024, Blossom Corporation had retained earnings of $600,000. During the year, Blossom had the following selected transactions: 1. 2. 3. 4. 5. Declared and paid cash dividends, $245,000. Earned profit before income tax, $750,000. Corrected a prior period error of $85,000, before income tax, which resulted in an understatement of profit in 2023. Reacquired 20,000 common shares for $50,000 more than the original issue price. This was the first time the company had ever reacquired its own shares. Completed a 3-for-1 stock split of the common shares. Blossom has a 25% income tax rate and reports under ASPE. Prepare a statement of retained earnings for the year ended December 31, 2024. (List items that increase adjusted retained earnings first.) BLOSSOM CORPORATION Statement of Retained Earnings $ $
On October 1, Dennis Company purchased ₱200,000 face value, 12% bonds at 98 plus accrued interestand brokerage fees and classified them as amortized cost assets. Interest is paid semiannually on January1 and July 1. Brokerage fees for this transaction were ₱700. At what amount should this acquisition ofbonds be recorded?
The LD TV Corporation had taxable income of $815,000 this past year. Its cost of goodssold was $0.8 million and its operating expenses were $300,000. Interest expenses onoutstanding debts were $100,000, and the company paid $30,000 in preferred stockdividends. The company received interest income of $15,000. Determine LD TV’s sales.
A Company provided the following data for the current year: Gain on sale of equipment – P60,000; Proceeds from sale of equipment – P100,000; Purchase of bonds with P2,000,000 face value – P1,800,000; Amortization of bond discount – P20,000; Dividends declared – P450,000; Dividends paid – P380,000; Proceeds from sale of treasury shares (at cost P650,000) – P750,000 What amount should be reported as net cash used in investing activities? [A] 1,700,000 [B] 1,760,000 [C] 1,880,000 [D] 1,940,000
TGW, a calendar year corporation, reported $4,088,000 net income before tax on its financial statements prepared in accordance with GAAP. The corporation's records reveal the following information: • TGW's depreciation expense per books was $463,000, and its MACRS depreciation deduction was $385,400. TGW capitalized $693,000 indirect expenses to manufactured inventory for book purposes and $832,000 indirect expenses to manufactured inventory for tax purposes. TGW's cost of manufactured goods sold was $2,572,000 for book purposes and $2,668,000 for tax purposes. • Four years ago, TGW capitalized $2,340,000 goodwill when it purchased a competitor's business. This year, TGW's auditors required the corporation to write the goodwill down to $1,575,000 and record a $765,000 goodwill impairment expense. Required: Compute TGW's taxable income. (Do not round intermediate calculations. Amounts to be deducted should be indicated with a minus sign.) TGW's net book income before tax Adjustments:…
Carow Corporation purchased, as a held-for-collection investment, $60,000 of the 8%, 5-year bonds of Harrison, Inc. for $65,118, which provides a 6% return. The bonds pay interest semiannually. Prepare Carow's journal entries for (a) the purchase of the investment, and (b) the receipt of semiannual interest and premium amortization.
On July 1, Year 1, XYZ Corporation purchased as a long-term investment a $2 million face amountABC Co. 6% bond for $2,025,000 plus accrued interest to yield 5.75%. On December 31, Year 1,the bonds had a fair value of $1,850,000. What amount of income should XYZ report on its incomestatement for the year ended December 31, Year 1, related to this bond investment if it is classifiedas a held-to-maturity security?a. $120,000b. $116,438c. $121,500d. $115,000
Napier Co. provided the following information on selected transactions during 2021: Purchase of land by issuing bonds, P250,000; Proceeds from issuing bonds, P500,000; Purchases of inventory, P950,000; Purchases of treasury shares, P150,000; Loans made to affiliated corporations, P350,000; Dividends paid to preference shareholders, P100,000; Proceeds from issuing preference share, P400,000; Proceeds from sale of equipment, P50,000. The net cash provided (used) by investing activities during 2021 is A P(300,000). B P(1,250,000). c) P50,000. (D) P(550,000).
Brooks Company purchases debt investments as trading securities at a cost of $71,000 on December 27. This is its first and only purchase of such securities. At December 31, these securities had a fair value of $90,000. Brooks sells a portion of its trading securities (costing $35,500) for $40,250 cash. Analyze each transaction above by showing its effects on the accounting equation-specifically, identify the accounts and amounts (including + or -) for each transaction.
Mercury Limited reported earnings of $75,000 in 20X9. The company has $55,000 of depreciation expense this year, and claimed. CCA of $90,000. The tax rate was 25%. At the end of 20X8, there was a $10,000 loss carryforward reported in a deferred tax asset. account valued at $2,200, and a deferred tax liability of $35,200 caused by capital assets with a net book value of $500,000 and UCC of $340,000. Required: What is the amount of income tax expense in 20X9? Tax expense $ Prepare the income tax entry or entries. View transaction list No 1 2 Date 20X9 23,250 20X9 View journal entry worksheet Income tax expense General Journal Deferred income tax asset Income tax payable Income tax payable Income tax expense Debit Credit
On July 1, Year 2, San Benon Company purchased 4,000 of the P1,000 face amount, 8% bonds of Oat Corp. for 3,692,000 to yield a 10% per annum. The bonds, which mature on July 1, Year 5, pay interest semiannually on January 1 and July 1. San Benon classifies the securities as at amortized cost. What is the investment carrying value at December 31, Year 2?

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