Matador Company is preparing its 2022 financial statements. Matador's bookkeeper has determined Income from Continuing Operations (ICO) but is not certain this number is accurate. Matador has a corporate tax rate of 30%. Use the following information to determine the adjustments, if any, to ICO. (Hint: if you are adjusting ICO, should the adjustments be pre-tax or net of tax?) If you need to increase ICO, enter your answer as a positive number; for instance: 3000 If you need to decrease ICO, enter your answer as a negative number; for instance: -3000 If you determine no change is needed to ICO; enter 0. Put your answers in the provided boxes. 1) During 2022, Matador declared preferred dividends of $70,000, paid $90,000 for dividends, and received $135,000 for dividends on available-for-sale equity securities. The bookkeeper did not include any of these when calculating ICO. Determine the adjustment to ICO. Matador has a corporate tax rate of 30%. 2) Over the past 4 years, Matador has estimated warranty expense based on 3.5% of sales. On May 1, 2022, after reviewing its most recent year end number for actual warranties paid, it decided to change this estimate to 4.75%. If Matador had used the 4.75% in the past, warranty expenses would be $150,000 higher in prior years. During fiscal 2022, Matador had earned sales revenues of $2,750,000 of which 20% were cash sales and 80% were credit sales. The bookkeeper calculated warranty expenses for 2022 using the 3.5%. Round answer to nearest whole dollar. Determine the adjustment to ICO. Matador has a corporate tax rate of 30%. 3) On April 1, 2020, Matador purchased a truck for $50,000 with a salvage value of $7,000 and useful life of 5 years which was depreciated using the straight-line method. On October 1, 2022, Matador decided to change the salvage to $3,630 and a total useful life of 9 years. The bookkeeper has not recorded any depreciation on the truck for 2022. Determine the adjustment to ICO. Matador has a corporate tax rate of 30%.
Matador Company is preparing its 2022 financial statements. Matador's bookkeeper has determined Income from Continuing Operations (ICO) but is not certain this number is accurate. Matador has a corporate tax rate of 30%. Use the following information to determine the adjustments, if any, to ICO. (Hint: if you are adjusting ICO, should the adjustments be pre-tax or net of tax?) If you need to increase ICO, enter your answer as a positive number; for instance: 3000 If you need to decrease ICO, enter your answer as a negative number; for instance: -3000 If you determine no change is needed to ICO; enter 0. Put your answers in the provided boxes. 1) During 2022, Matador declared preferred dividends of $70,000, paid $90,000 for dividends, and received $135,000 for dividends on available-for-sale equity securities. The bookkeeper did not include any of these when calculating ICO. Determine the adjustment to ICO. Matador has a corporate tax rate of 30%. 2) Over the past 4 years, Matador has estimated warranty expense based on 3.5% of sales. On May 1, 2022, after reviewing its most recent year end number for actual warranties paid, it decided to change this estimate to 4.75%. If Matador had used the 4.75% in the past, warranty expenses would be $150,000 higher in prior years. During fiscal 2022, Matador had earned sales revenues of $2,750,000 of which 20% were cash sales and 80% were credit sales. The bookkeeper calculated warranty expenses for 2022 using the 3.5%. Round answer to nearest whole dollar. Determine the adjustment to ICO. Matador has a corporate tax rate of 30%. 3) On April 1, 2020, Matador purchased a truck for $50,000 with a salvage value of $7,000 and useful life of 5 years which was depreciated using the straight-line method. On October 1, 2022, Matador decided to change the salvage to $3,630 and a total useful life of 9 years. The bookkeeper has not recorded any depreciation on the truck for 2022. Determine the adjustment to ICO. Matador has a corporate tax rate of 30%.
Chapter18: Accounting Periods And Methods
Section: Chapter Questions
Problem 50P
Related questions
Question
![Matador Company is preparing its 2022 financial statements. Matador's bookkeeper has
determined Income from Continuing Operations (ICO) but is not certain this number is
accurate. Matador has a corporate tax rate of 30%.
Use the following information to determine the adjustments, if any, to ICO.
(Hint: if you are adjusting ICO, should the adjustments be pre-tax or net of tax?)
If you need to increase ICO, enter your answer as a positive number; for instance: 3000
If you need to decrease ICO, enter your answer as a negative number; for instance: -3000
If you determine no change is needed to ICO; enter 0.
Put your answers in the provided boxes.
1) During 2022, Matador declared preferred dividends of $70,000, paid $90,000 for
dividends, and received $135,000 for dividends on available-for-sale equity securities.
The bookkeeper did not include any of these when calculating ICO. Determine the
adjustment to ICO. Matador has a corporate tax rate of 30%.
2) Over the past 4 years, Matador has estimated warranty expense based on 3.5% of sales.
On May 1, 2022, after reviewing its most recent year end number for actual warranties
paid, it decided to change this estimate to 4.75%. If Matador had used the 4.75% in the
past, warranty expenses would be $150,000 higher in prior years. During fiscal 2022,
Matador had earned sales revenues of $2,750,000 of which 20% were cash sales and 80%
were credit sales. The bookkeeper calculated warranty expenses for 2022 using the 3.5%.
Round answer to nearest whole dollar. Determine the adjustment to ICO. Matador has a
corporate tax rate of 30%.
3) On April 1, 2020, Matador purchased a truck for $50,000 with a salvage value of $7,000
and useful life of 5 years which was depreciated using the straight-line method. On
October 1, 2022, Matador decided to change the salvage to $3,630 and a total useful life
of 9 years. The bookkeeper has not recorded any depreciation on the truck for 2022.
Determine the adjustment to ICO. Matador has a corporate tax rate of 30%.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F901ce40e-ea2f-49c3-bd67-e61fcea73734%2Ff8cd3533-801c-4c67-ae63-f516f83de8fb%2Fs5msysm_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Matador Company is preparing its 2022 financial statements. Matador's bookkeeper has
determined Income from Continuing Operations (ICO) but is not certain this number is
accurate. Matador has a corporate tax rate of 30%.
Use the following information to determine the adjustments, if any, to ICO.
(Hint: if you are adjusting ICO, should the adjustments be pre-tax or net of tax?)
If you need to increase ICO, enter your answer as a positive number; for instance: 3000
If you need to decrease ICO, enter your answer as a negative number; for instance: -3000
If you determine no change is needed to ICO; enter 0.
Put your answers in the provided boxes.
1) During 2022, Matador declared preferred dividends of $70,000, paid $90,000 for
dividends, and received $135,000 for dividends on available-for-sale equity securities.
The bookkeeper did not include any of these when calculating ICO. Determine the
adjustment to ICO. Matador has a corporate tax rate of 30%.
2) Over the past 4 years, Matador has estimated warranty expense based on 3.5% of sales.
On May 1, 2022, after reviewing its most recent year end number for actual warranties
paid, it decided to change this estimate to 4.75%. If Matador had used the 4.75% in the
past, warranty expenses would be $150,000 higher in prior years. During fiscal 2022,
Matador had earned sales revenues of $2,750,000 of which 20% were cash sales and 80%
were credit sales. The bookkeeper calculated warranty expenses for 2022 using the 3.5%.
Round answer to nearest whole dollar. Determine the adjustment to ICO. Matador has a
corporate tax rate of 30%.
3) On April 1, 2020, Matador purchased a truck for $50,000 with a salvage value of $7,000
and useful life of 5 years which was depreciated using the straight-line method. On
October 1, 2022, Matador decided to change the salvage to $3,630 and a total useful life
of 9 years. The bookkeeper has not recorded any depreciation on the truck for 2022.
Determine the adjustment to ICO. Matador has a corporate tax rate of 30%.
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