During 2020, Liselotte Company reported income of $1,500,000 before income taxes and realized a gain of $450,000 on the disposal of assets related to a discontinued operation. The criteria for classification as a discontinued operation is appropriate for this sale. The income is subject to income taxation at the rate of 34%. The gain on the sale of the plant is taxed at 30%. Indicate an appropriate presentation of these items in the income statement.

During 2020, Liselotte Company reported income of $1,500,000 before income taxes and realized a gain of $450,000 on the disposal of assets related to a discontinued operation. The criteria for classification as a discontinued operation is appropriate for this sale. The income is subject to income taxation at the rate of 34%. The gain on the sale of the plant is taxed at 30%. Indicate an appropriate presentation of these items in the income statement.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 4MC: Prior to and during 2019, Shadrach Company reported tax depreciation at an amount higher than the...

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Prior to and during 2019, Shadrach Company reported tax depreciation at an amount higher than the amount of financial depreciation, resulting in a book value of the depreciable assets of 24,500 for financial reporting purposes and of 20,000 for tax purposes at the end of 2019. In addition, Shadrach recognized a 3,500 estimated liability for legal expenses in the financial statements during 2019; it expects to pay this liability (and deduct it for tax purposes) in 2023. The current tax rate is 30%, no change in the tax rate has been enacted, and the company expects to be profitable in future years. What is the amount of the net deferred tax liability at the end of 2019? a. 300 b. 450 c. 1,050 d. 1,350
During 2017, Liselotte Company reported income of$1,500,000 before income taxes and realized a gain of$450,000 on the disposal of assets related to a discontinuedoperation. The criteria for classification as a discontinued operation is appropriate for this sale. The income issubject to income taxation at the rate of 34%. The gainon the sale of the plant is taxed at 30%. Indicate anappropriate presentation of these items in the incomestatement.
The following information relates to Hardin Limited's year-ended 31 December 2020: The statement of comprehensive income shows profit for the year of R154 000. The calculation of this profit included the following income and expenses: Impairment of building: R64 000 (before tax: R74 000) Profit on sale of plant: R23 200 (before tax: R32 000) • Inventory write-down: R10 000 (before tax: R15 000) • The statement of changes in equity reflected preference dividends of R3 450. 12 000 shares in issue throughout the year. Required: Calculate the basic earnings and the headline earnings and disclose the headline earnings per share for the year-ended 31 December 2020 The following information is provided for Present limited for the year ended 31 December 2020. Present Limited had basic earnings for 2020 of R520 000. This basic eamings figure was equal to its profit for the year. It had no components of other comprehensive income. Present Limited had 2 200 000 ordinary shares in issue throughout…
Dry Valley Corporation reported the following items in its adjusted trial balance for the year ended December 31, 2026: Income from continuing operations before income taxes Gain on disposal of discontinued component Loss from operations of discontinued component Dry Valley is subject to a 20% tax rate. Instructions $120,000 28,000 (60,000) Prepare the December 31, 2026, income statement for Dry Valley Corporation, starting with income from continuing operations before income taxes.
The following information relates to Hardin Limited’s year-ended 31 December 2020:  The statement of comprehensive income shows profit for the year of R154 000.  The calculation of this profit included the following income and expenses: Impairment of building: R64 000 (before tax: R74 000)  Profit on sale of plant: R23 200 (before tax: R32 000)  Inventory write-down: R10 000 (before tax: R15 000)  The statement of changes in equity reflected preference dividends of R3 450.  12 000 shares in issue throughout the year. Required: Calculate the basic earnings and the headline earnings and disclose the headline earnings per share for the year-ended 31 December 2020
On January 2, 2021, Tobias Company began ysing straight-line depreciation for a certain class of assets. In the past, the company had used double-declining-balance depreciation for these assets. As of January 2, 2021, the amount of the change in accumulated depreciation is $42,500. The appropriate tax rate is 25%. The separately reported change in 2021 earnings is: Multiple Choice An increase of $42,500. A decrease of $42,500. An increase of $31,875. None of these answer choices are correct.
lab Company’s accounting policy with respect to investment properties is to measure them at fair value at the end of each reporting period. One of its investment properties was measured at P8,000,000 on December 31, 2020.The property had been acquired on January 1, 2020 for a total of P7,600,000, made up of P6,900,000 paid to the vendor. P300,000 paid to the local authority as a property transfer tax and P400,000 paid to professional advisers. The useful life of the property is 40 years. What is the gain to be recognized in profit or loss for the year ended December 31, 2020 in respect of the investment property? * P400,000 P590,000 P700,000 P800,000 answer not given
On January 2, 2024, Tobias Company began using straight-line depreciation for a certain class of assets. In the past, the company had used double-declining-balance depreciation for these assets. As of January 2, 2024, the amount of the change in accumulated depreciation is $47,500. The appropriate tax rate is 25%. The separately reported change in 2024 earnings is:
Bramble Corporation's pre-tax accounting income of $724,000 for the year 2023 included the following items: Amortization of identifiable intangibles $147,000 Depreciation of building 114,000 Loss from discontinued operations 46,000 Unusual, non-recurring gains 157,000 Profit-sharing payments to employees 63,100 Ewing Industries Ltd. would like to purchase Bramble. In trying to measure Bramble's normalized earnings for 2023, Ewing determines that the building's fair value is triple the book value and that its remaining economic life is double the life that Bramble is using. Ewing would continue the profit-sharing payments to employees, with the payments being based on income from continuing operations before amortization and depreciation. Calculate the 2023 normalized earnings amount of Bramble that Ewing would use to calculate goodwill. Normalized earnings +A
During 2022, Sunland Corporation had the following amounts, all before calculating tax effects: income before income taxes $490,000, loss on operation of discontinued music division $64,000, gain on disposal of discontinued music division $45,000, and unrealized loss on available-for-sale securities $155,000. The income tax rate is 33%. Prepare a partial income statement, beginning with income before income taxes, and a statement of comprehensive income for the year ended December 31, 2022. (Enter loss using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).) SUNLAND CORPORATION Income Statement (Partial) $ $
Swifty Corporation's pre-tax accounting income of $748,000 for the year 2023 included the following items: Amortization of identifiable intangibles $142,000 Depreciation of building 115,000 Loss from discontinued operations 46,000 Unusual, non-recurring gains 157,000 Profit-sharing payments to employees 63,600 Ewing Industries Ltd. would like to purchase Swifty. In trying to measure Swifty's normalized earnings for 2023, Ewing determines that the building's fair value is triple the book value and that its remaining economic life is double the life that Swifty is using. Ewing would continue the profit-sharing payments to employees, with the payments being based on income from continuing operations before amortization and depreciation. Calculate the 2023 normalized earnings amount of Swifty that Ewing would use to calculate goodwill. Normalized earnings $
Report the above information in the form of the following statements for external use: I) Statement of Profit or Loss for the year ended 31 December 2020.