Alpesh On January 1, 2024, two private companies that report under ASPE, Blossom Ltd. and Cale Inc., were incorporated. Each companyoperates a restaurant and had identical revenues during the year of $2 million but Blossom bought its building for $1.5 million and therelated land for $600,000. The company estimated that the building would have a useful life of 20 years with no residual value.Blossom uses the straight-line method of depreciation. Because of the building purchase, Blossom had an outstanding 4% bank loanduring the year amounting on average to $2.5 million.Cale, however, did not buy a building. Instead, it rented a building under a five-year operating lease starting on January 1, 2024, for$15,000 per month. Because of this, the company had to install leasehold improvements for $200,000, which were completed in thefirst few days of January. Because Cale did not have to buy a building, its outstanding 4% bank loan during 2024 averaged only$350,000.The income tax rate for both companies is 22%. Assume both companies had identical revenues and expenses except for the itemsnoted above.(a)If Luxor had net income of $150,000 for the year ended December 31, 2024, what net income did Cale have? (Round intermediatecalculation and final answer to O decimal places, e.g. 5,275.)Cale net income $eTextbook and MediaSave for LaterAttempts: 0 of 3 used Submit Answer

Name: Alpesh On January 1, 2024, two private companies that report under ASP
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If Luxor had net income of $150,000 for the year ended December 31, 2024, what net income did Cale have? (Round intermediate calculation and final answer to O decimal places, e.g. 5,275.) Cale net income eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer

If Luxor had net income of $150,000 for the year ended December 31, 2024, what net income did Cale have? (Round intermediate calculation and final answer to O decimal places, e.g. 5,275.) Cale net income eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer

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

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 11E: On January 1, 2014, Klinefelter Company purchased a building for 520,000. The building had an...

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