E 3-2 - Gross profit method (With entity policy on GPR) The Thomas Corporation was organized on Jan. 1, 2020. On Dec. 31, 2021, the corporation lost most of its inventory in a warehouse fire just before the year-end count of inventory was to take place. Data from the records disclosed the following: 2020 4,069,400 3,940,000 80,000 21% 2021 4,157,000 4,180,000 100,000 Goods available for sale Sales Sales returns and allowances Gross profit rate On Jan. 1, 2021, the Corporation's pricing policy was changed so that the gross profit rate would be three percentage points higher than the one earned in 2020. Salvaged undamaged merchandise was marked to sell at P120,000 while damaged merchandise was marked to sell at P80,000 had an estimated realizable value of P18,000. Required: Compute inventory fire loss.

E 3-2 - Gross profit method (With entity policy on GPR) The Thomas Corporation was organized on Jan. 1, 2020. On Dec. 31, 2021, the corporation lost most of its inventory in a warehouse fire just before the year-end count of inventory was to take place. Data from the records disclosed the following: 2020 4,069,400 3,940,000 80,000 21% 2021 4,157,000 4,180,000 100,000 Goods available for sale Sales Sales returns and allowances Gross profit rate On Jan. 1, 2021, the Corporation's pricing policy was changed so that the gross profit rate would be three percentage points higher than the one earned in 2020. Salvaged undamaged merchandise was marked to sell at P120,000 while damaged merchandise was marked to sell at P80,000 had an estimated realizable value of P18,000. Required: Compute inventory fire loss.

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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Problem 08-48 (Algo) [LO 8-1, 8-7, 8-8] Ms. Drake sold a business that she had operated as a sole proprietorship for 18 years. On the date of sale, the business balance sheet showed the following assets: Accounts receivable Inventory Furniture and equipment: Cost Accumulated depreciation Leasehold improvements: Cost Accumulated amortization Tax Basis $ 37,750 143,200 Net cash flow 50,750 (40,600) 22,000 (4,400) Required: The purchaser paid a lump-sum price of $316,000 cash for the business. The sales contract stipulates that the FMV of the business Inventory is $156,400, and the FMV of the remaining balance sheet assets equals adjusted tax basis. Assuming that Ms. Drake's marginal tax rate on ordinary income is 35 percent and her rate on capital gain is 15 percent, compute the net cash flow from the sale of her business.
Which of the following best describes the IRC $ 165 reportable loss transaction thresholds applicable to corporations? a. Single year loss of $50,000. b. Single year loss of $2 million and a cumulative loss of $4 million. c. Single year loss of $4 million and a cumulative loss of $20 million. d. Single year loss of $10 million and a glimmulative loss of $20 million.
Rivendell Corporation uses the accrual method of accounting and has the following assets as of the end of 2020. Rivendell converted to an S corporation on January 1, 2021. (Leave no answer blank. Enter zero if applicable.)Asset Adjusted Basis FMVCash $ 40,000 $ 40,000Accounts receivable 30,000 30,000Inventory 130,000 60,000Land 100,000 125,000Totals $ 300,000 $ 255,000 b. Assuming the land was valued at $200,000, what would be Rivendell’s net unrealized gain at the time it converted to an S corporation? c. Assuming the land was valued at $125,000 but that the inventory was valued at $85,000, what would be Rivendell’s net unrealized gain at the time it converted to an S corporation?
Subject: accounting
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Subject: accounting
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selected data for 2020: Retained Eamings, January 1, 2020 $900,000 Net Income 88,200 Stock dividends declared 14,280 During the year, the company changed its inventory method from FIFO to LIFO which had resulted in a net of tax 11,000 decrease in income Cash dividends declared 21,000 During 2020, the company discovered that the 2019 10,000 depreciation expense were overstated by a pretax amount of Tax rate 30% Based on the data above, Retained Earnings at December 31, 2020 was: * $951,920 $952,220 $948,920
A-5
What is the overstatement or understatement in the beginning retained earnings for 2019? 500,000 understatement 200,000 understatement 300,000 overstatement 100,000 overstatement 500,000 overstatement 200,000 overstatement 300,000 understatement 100,000 understatement None of the choices
Problem 12-30 (Algorithmic) (LO. 2, 4) In January of the current year, Wanda transferred machinery worth $355,000 (adjusted basis of $53,250) to a controlled corporation, Oriole, Inc. The transfer qualified under § 351. Wanda had deducted $284,000 of depreciation on the machinery while it was used in her proprietorship. Later during the year, Oriole sells the machinery for $337,250. Answer the following questions regarding the tax consequences to Wanda and to Oriole on the sale of the machinery. a. Does Wanda recognize a gain or loss of any kind on the transfer of the machinery to Oriole? b. Which taxpayers, if any, will recognize a gain as a result of the subsequent sale of the machinery by Oriole? c. What is Oriole's basis in the machinery before the sale? d. What is Oriole's gain from the sale? Oriole has a gain of $ which is treated as