Morlan Corporation is preparing its December 31, 2025, financial statements. Two events that occurred between December 31, 2025,and March 10, 2026, when the statements were issued, are described below.1.A liability, estimated at $160,000 at December 31, 2025, was settled on February 26, 2026, at $170,000.2.A flood loss of $80,000 occurred on March 1, 2026.What effect do these subsequent events have on 2025 net income?BIUT₂ T²Ix |!!!IIIE =IIá[།*O Word(s)

Settlement of Liability:Event Description: A liability estimated at $160,000 as of December 31,…

Answered: Morlan Corporation is preparing its…

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

Chapter12: Intangibles

Section: Chapter Questions

Problem 10MC

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Morlan Corporation is preparing its December 31, 2020, financial statements. Two events that occurred between December 31, 2020, and March 10, 2021, when the statements were issued, are described below. A liability, estimated at $160,000 at December 31, 2020, was settled on February 26, 2021, at $170,000. A flood loss of $80,000 occurred on March 1, 2021. What effect do these subsequent events have on 2020 net income?
Morlan Corporation is preparing its December 31, 2017, financial statements. Two events that occurred betweenDecember 31, 2017, and March 10, 2018, when the statements were issued, are described below.1. A liability, estimated at $160,000 at December 31, 2017, was settled on February 26, 2018, at $170,000.2. A flood loss of $80,000 occurred on March 1, 2018.What effect do these subsequent events have on 2017 net income?
Based on the information given to Jeffrey, he submits a report on January 1 with some important calculations for management to use, both for analysis and to devise an action plan. Which of the following statements in his report are true? Check all that apply. J&H Corp. has -$94.5 million of noninterest-bearing current assets net of noninterest-charging liabilities. 3&H Corp. has $250.7 million of net operating capital. The firm uses $465.5 million of total net operating capital to run the business. J&H Corp, has $147.0 million in nonoperating assets. Based on the information on industry averages, other players in the industry would generate higher profits than 1814 Corp. if they had no debt and held no financial assets.
At the end of its first year of operations on December 31, 2022, the Metro Company reported pretax financial income of $100,000. An investigation of that income revealed the following items:· Bad debts expense of $12,000 was recognized (reported on 2022 income statement). The accounts will be written off (tax deductible) in 2023.· Interest received on municipal bonds: $7,500.· Warranty expenses of $16,000 were accrued for financial reporting purposes, but were not expected to result in a cash payment until 2023.· Depreciation on the tax return exceeded depreciation for financial reporting purposes by $32,000.Assume that any deferred tax assets are considered more likely than not to be realized. The enacted income tax rate for all years is 25%.Required:1) Compute taxable income. Show your calculation. If not, no credit.2) Prepare the entry to record income tax expense and any related assets and liabilities for Metro on December 31, 2022.
The following December 31, 2024, fiscal year-end account balance information is available for the Stonebridge Corporation: Cash and cash equivalents Accounts receivable (net) $ 6,300 33,000 73,000 Inventory Property, plant, and equipment (net) 185,000 Accounts payable 52,000 Salaries payable Paid-in capital 24,000 165,000 The only asset not listed is short-term investments. The only liabilities not listed are $43,000 notes payable due in two years and related accrued interest payable of $1,000 due in four months. The current ratio at year-end is 1.5:1. Required: Determine the following at December 31, 2024: 1. Total current assets 2. Short-term investments 3. Retained earnings
The NOT A CHANCE Company had a bad financial condition caused by deficiency of liquid asset. On June 30, 2020, the following information was available: The assets amounted to P520,000 (includes cash - 20,000; accounts receivable – 50,000; Inventory - 230,000, equipment P 200,000, and patent for the balance). The liabilities to be liquidated amounted to 550,000 (salaries – 20,000; taxes payable 65,000; accounts payable 100,000 and notes payable 365,000) During the six-month period ending December 31, 2020, the trustee sold all inventories for P180,000 cash, collected only 80% of the accounts receivable with balance written off; and paid off accounts payable and all liabilities with priorities, as well as P 5,000 for estate administration expense. 15.How much is the ending cash balance on December 31, 2020? A. 20,000 35,000 С. 50,000 60,000 В. D.
Mega Company has a December 31 year-end. All of the following events occurred between December 31, 2021, and March 1, 2022 when its financial statements were issued. Which is a recognized subsequent event? Answer a. A key supplier declared bankruptcy as a result of uninsured flood damage that occurred in February 2022. b. A lawsuit for which the company had accrued a contingent liability at December 31,2021 of $1,000,000 was settled for $900,000 in January 2022 c. Employees at one of the company’s plants went on strike in late January 2022. d. Additional shares of 3%, $100 par preferred stock were issued for $5,000,000 in February 2022.
Bridgeport Corporation commenced operations in early 2025. The corporation incurred $44,500 of costs such as fees to underwriters, legal fees, state fees, and promotional expenditures during its formation. Prepare journal entries to record the $44,500 expenditure and 2025 amortization, if any. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. List all debit entries before credit entries.). Account Titles and Explanation (To record costs incurred) (To record amortization expense) Debit Credit
The following December 31, 2021, fiscal year-end account balance information is available for the Stonebridge Corporation: Cash and cash equivalents $ 6,400 Accounts receivable (net) 34,000 Inventory 74,000 Property, plant, and equipment (net) 190,000 Accounts payable 53,000 Salaries payable 14,000 Paid-in capital 170,000 The only asset not listed is short-term investments. The only liabilities not listed are $44,000 notes payable due in two years and related accrued interest of $1,000 due in four months. The current ratio at year-end is 1.8:1. Required:Determine the following at December 31, 2021: Total Current Asset? Short Term Investment? Retained Earnings?
Sky Corporation has contracted with you to prepare a statement of cash flows. The controller has provided the following information. December 31 2021 $ 2020 Cash 38,800 $ 13,100 Accounts receivable 12,200 12,000 10,100 Inventory Equity investments Building Equipment Copyrights 10,100 3,100 40,100 5,100 $108,200 29,400 20,200 5,200 $91,200 Allowance for doubtful accounts $ 3,000 2,000 4,500 4,500 6,000 Accumulated depreciation – equipment Accumulated depreciation – buildings Accounts payable Dividends payable Notes payable, short-term (nontrade) Long-term notes payable Common stock 5,100 4,100 5,000 4,000 25,000 33,000 5,100 $369,000 3,000 36,000 38,000 Retained earnings 21,100 $420,000
Cone Corporation is in the process of preparing its December 31, 2024, balance sheet. There are some questions as to the proper classification of the following items: a. $68,000 in cash restricted in a savings account to pay debt. The debt matures in 2028. b. Prepaid rent of $42,000, covering the period January 1, 2025, through December 31, 2026. c. Notes payable of $236,000. The notes are payable in annual installments of $38,000 each, with the first installment payable on March 1, 2025. d. Accrued interest payable of $30,000 related to the notes payable is due June 30, 2025. e. Investment in equity securities of other corporations, $116,000. Cone intends to sell one-half of the securities in 2025. Required: Prepare the asset and liability sections of a classified balance sheet to show how each of the above items should be reported. X Answer is not complete. CONE CORPORATION Balance Sheet (Partial) At December 31, 2024 Current assets: Prepaid rent Investment in equity securities…
On January 1, 2024, the Marjlee Company began construction of an office building to be used as its corporate headquarters. The building was completed early in 2025. Construction expenditures for 2024, which were incurred evenly throughout the year, totaled $9,900,000. Marjlee had the following debt obligations which were outstanding during all of 2024: Construction loan, 108 Long-term note, 9 Long-term note, 68 $ 2,475,000 3,300,000 6,600,000 Required: Calculate the amount of Interest capitalized in 2024 for the building using the specific interest method. Interest capitalized

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