In April, 2022, Norman Industries sold available-for-sale debt securities that cost $560,000 and received a check from its broker for $795,000. When the check was deposited, the accounting clerk debited cash and credited Available-for-Sale Debt Investments for the full amount. The CFO questioned the entry in December, 2022. If this is an error, what is the proper correcting entry? (Tax rate is 40%.) Group of answer choices Available-for-Sale Debt Investments 795,000 Realized Gain 235,000Retained Earnings-Prior Period Adj. 560,000 Available-for-Sale Debt Investments 235,000 Income Tax Expense 94,000Retained Earnings 141,000 Available-for-Sale Debt Investments 235,000 Realized Gain 235,000 Realized Gain 235,000 Available-for-Sale Debt Investments 235,000
In April, 2022, Norman Industries sold available-for-sale debt securities that cost $560,000 and received a check from its broker for $795,000. When the check was deposited, the accounting clerk debited cash and credited Available-for-Sale Debt Investments for the full amount. The CFO questioned the entry in December, 2022. If this is an error, what is the proper correcting entry? (Tax rate is 40%.) Group of answer choices Available-for-Sale Debt Investments 795,000 Realized Gain 235,000Retained Earnings-Prior Period Adj. 560,000 Available-for-Sale Debt Investments 235,000 Income Tax Expense 94,000Retained Earnings 141,000 Available-for-Sale Debt Investments 235,000 Realized Gain 235,000 Realized Gain 235,000 Available-for-Sale Debt Investments 235,000
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
Chapter4: The Balance Sheet And The Statement Of Shareholders' Equity
Section: Chapter Questions
Problem 5C: It is February 16, 2020, and you are auditing Davenport Corporation's financial statements for 2019...
Related questions
Question
100%
In April, 2022, Norman Industries sold available-for-sale debt securities that cost $560,000 and received a check from its broker for $795,000. When the check was deposited, the accounting clerk debited cash and credited Available-for-Sale Debt Investments for the full amount. The CFO questioned the entry in December, 2022. If this is an error, what is the proper correcting entry? (Tax rate is 40%.)
Group of answer choices
Realized Gain 235,000
Retained Earnings-Prior Period Adj. 560,000
Income Tax Expense 94,000
Retained Earnings 141,000
Realized Gain 235,000
Available-for-Sale Debt Investments 235,000
| Available-for-Sale Debt Investments | 795,000 | |
Retained Earnings-Prior Period Adj. 560,000
| Available-for-Sale Debt Investments | 235,000 | |
Retained Earnings 141,000
| Available-for-Sale Debt Investments | 235,000 | |
| Realized Gain | 235,000 | |
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT