Falcon Corporation sold equipment to its 80%-owned subsidiary, Rodent Corp., on January 1, 2005. Falcon sold the equipment for $110,000 when its book value was $85,000 and it had a 5- year remaining useful life with no expected salvage value. Separate balance sheets for Falcon and Rodent included the following equipment and accumulated depreciation amounts on December 31, 2005: Falcon Rodent Equipment $ 300,000 Less: Accumulated depreciation 750,000 (200,000) 550,000 $ 50,000) Equipment-net $ 250,000 Consolidated amounts for equipment and accumulated depreciation at December 31, 2005 were respectively (0 S (

Falcon Corporation sold equipment to its 80%-owned subsidiary, Rodent Corp., on January 1, 2005. Falcon sold the equipment for $110,000 when its book value was $85,000 and it had a 5- year remaining useful life with no expected salvage value. Separate balance sheets for Falcon and Rodent included the following equipment and accumulated depreciation amounts on December 31, 2005: Falcon Rodent Equipment $ 300,000 Less: Accumulated depreciation 750,000 (200,000) 550,000 $ 50,000) Equipment-net $ 250,000 Consolidated amounts for equipment and accumulated depreciation at December 31, 2005 were respectively (0 S (

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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Prominent Sdn Bhd invested in two projects, project Alpha and project Beta. The projects are independent of each other. The following schedule shows the cash flows for each project. Year Project Alpha Project Beta 0 -10,000 -10,000 1 5,000 1,000 2 4,000 2,000 3 2,000 2,000 4 2,000 3,000 5 1,000 6,000 The following schedule shows the profit for each project. Year Project Alpha Project Beta 0 0 0 1 2,000 1,000 2 2,000 1,000 3 2,000 2,000 4 2,000 2,000 5 2,000 4,000 The discount rate is 10%. Additional information : Appraisal method 1: Rate of return : Year Project Alpha Project Beta 1 2,000 1,000 2 2,000 1,000 3 2,000 2,000 4 2,000 2,000 5 2,000 4,000 total profit 10000 10000 average annual profit (total profit / number of years) 2000 (10000/5) 2000 (10000/5) initial investment 10000 10000 accounting rate of return = average annual profit initial investment * 100 20%…
Prominent Sdn Bhd invested in two projects, project Alpha and project Beta. The projects are independent of each other. The following schedule shows the cash flows for each project. Year Project Alpha Project Beta 0 -10,000 -10,000 1 5,000 1,000 2 4,000 2,000 3 2,000 2,000 4 2,000 3,000 5 1,000 6,000 The following schedule shows the profit for each project. Year Project Alpha Project Beta 0 0 0 1 2,000 1,000 2 2,000 1,000 3 2,000 2,000 4 2,000 2,000 5 2,000 4,000 The discount rate is 10%. Additional information : Appraisal method 1: Rate of return : Year Project Alpha Project Beta 1 2,000 1,000 2 2,000 1,000 3 2,000 2,000 4 2,000 2,000 5 2,000 4,000 total profit 10000 10000 average annual profit (total profit / number of years) 2000 (10000/5) 2000 (10000/5) initial investment 10000 10000 accounting rate of return = average annual profit initial investment * 100 20%…
Information for Hobson Corporation for the current year ($ in millions): Income from continuing operations before tax Loss on discontinued operation (pretax) Temporary differences (all related to operating income): Accrued warranty expense in excess of expense included in operating income Depreciation deducted on tax return in excess of depreciation expense Permanent differences (all related to operating income): Nondeductible portion of entertainment expense The applicable enacted tax rate for all periods is 25%. How much tax expense on income from continuing operations would be reported in Hobson's income statement? Note: Round the final answer to 2 decimal places. $ 230 10 85 175 20
Kk316.
Five mutually exclusive projects had the following data: V W X Y Z NPV $(3,000) $56,000 $23,000 $14,000 $28,000 IRR 7% 10% 15% 13% 6% Which project is preferred?
6. Consider the following (incomplete) sinking fund schedule (table). Note that there is no payment at t = 2. You MUST show your work to answer each of the two parts of this problem. Time Interest Sinking Interest S.F. Bal. After Net in on Fund on Balance Years Loan Deposit $0 S.F. $0 Deposit on Loan $0 $0 $100 $2,000 1 $700 3 $795 $35.44 4. $0 (a) Find the net balance on loan at t = 3. (b) Find the sinking fund deposit at t= 4.
Information for Hobson Corporation for the current year ($ in millions): Income from continuing operations before tax Loss on discontinued operation (pretax) Temporary differences (all related to operating income): Accrued warranty expense in excess of expense included in operating income Depreciation deducted on tax return in excess of depreciation expense Permanent differences (all related to operating income): Nondeductible portion of entertainment expense The applicable enacted tax rate for all periods is 25%. What should Hobson report as income from continuing operations? $ 230 10 85 175 20