On January 1, 2024, Kroll Corporation paid $2,954,000 for 34 percent of the outstanding voting stock of Sharon,Incorporated, and appropriately applied the equity method for its investment. Any excess of cost over Sharon's bookvalue was attributed to an indefinite-lived asset. During 2024, Sharon reports $675,000 in net income and a$1,006,000 other comprehensive income loss. Sharon also declares and pays $20,000 in dividends.Required:a. What amount should Kroll report as its Investment in Sharon on its December 31, 2024, balance sheet?b. What amount should Kroll report as Equity in Earnings of Sharon on its 2024 income statement?a. Investmentb. Equity in earnings

Step 1: Initial InvestmentKroll invested $2,954,000 in Sharon.Step 2: Equity in EarningsSharon's net…

Answered: On January 1, 2024, Kroll Corporation…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter16: Accounting Periods And Methods

Section: Chapter Questions

Problem 15DQ

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Gray, Inc., a C corporation, has taxable income from operations of 1,452,000 for 2019. It also has a net long-term capital loss of 355,000 from the sale of a subsidiarys stock. The year 2019 is the first year in the last 10 years that Gray has not had at least 500,000 per year of net long-term capital gains. What is Grays 2019 taxable income? What, if anything, can it do with any unused capital losses?
Ironwood Corporation has ordinary taxable income of $65,000 in 2019, and a short-term capital loss of $15,000. What is the corporation's tax liability for 2019? $7,500 $5,250 $10,500 $13,650 None of the above
Pearson company owns 42% of Stadium corporation. Pearson has a basis in the stock of Stadium corporation for $13,000 and in a note recievable from the Stadium corporation of $9,000. Instructions: calculate the basis of the stock, the basis in the note and the amount of the ordinary loss and income that Pearson must report in 2021 and 2022 a. The Stadium corporation has a net operating loss of $46,000 in year 2021. b. The Stadium corporation has net operating income of $17,000 in year 2022. They also made a distribution of $11,000.
On January 1, 2020, Papa acquired all the identifiable assets and assumed all of the liabilities of Mama by paying cash of P5,000,000. On this date, Mama’s identifiable assets and liabilities have fair values of P8,000,000 and P P4,000,000, respectively. Papa agrees to pay an additional amount equal to 10% of the 2020 year end profit that exceeds P2,000,000. Mama historically has reported profits of P1,600,000 to P2,200,000 each year. After assessing the expected level of profits for the year based on the forecast and plans, as well as industry trends. Papa estimated that the fair value of the contingent consideration is P50,000. Required: Compute the goodwill or gain on bargain purchase and prepare the necessary journal entries
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Bassett Inc. acquired all of the outstanding common stock of Brinkman Corp. on January 1, 2019, for $422,000. Equipment with a ten-year life was undervalued on Brinkman's financial records by $48,000. Brinkman also owned an unrecorded customer list with an assessed fair value of $71,000 and an estimated remaining life of five years. Brinkman earned reported net income of $185,000 in 2019 and $226,000 in 2020. Dividends of $75,000 were paid in each of these two years. Selected account balances as of December 31, 2021, for the two companies follow. Revenues Expenses Investment income Retained earnings, 1/1/21 Dividends paid Multiple Choice $806,000. $811,000. If the equity method had been applied, what would be the Investment in Brinkman Corp. account balance within the records of Bassett at the end of 2021? $863,000. $920,000. Bassett $1,120,000 $1,036,000. 500,000 Not given 850,000 132,000 Brinkman $860,000 600,000 Ø 650,000 80,000
Tiger Sticks, Inc. is a calendar year S Corporation in Augusta Georgia. On December 31, 2019 it had an ending balance in AAA of $2 million and an ending balance n AEP of $500,000. In 2020 Tiger Sticks, Inc. sustained a temporary setback with a key executive and the K-1 that was received by Goat Woods, its sole shareholder, reported a non-separately stated loss of $1 million and the only separately stated item was for a $25,000 charitable gift. Assume that Goat Woods has sufficient basis. Calculate the ending balances of AAA and AEP for 2020 on December 31, 2020. (show your work)
Dodd Corp. is preparing its December 31 financial statements and must determine the proper accounting treatment for the following situations • For the year ended December 31, Dodd has a loss carry forward of $180,000 available to offset future taxable income, However, there are no temporary differences. On December 30, Dodd received a $200,000 offer for its patent Dodd's management is considering whether to sell the patent. The offer expires on February 28 of the next year. The patent has a carrying amount of $100,000 at December 31 Assume a current and future income tax rate of 21 percent. In its income statement, Dodd should recognize an increase in net income of O $0 O $37,800 $79,000
In its first year (2021), Camco Incorporated generated a $92,000 net operating loss, and it made a $5,000 cash donation to a local charity. In its second year (2022), Camco generated a $210,600 profit, and it made a $10,000 donation to the same charity. Required: Compute Camco's taxable income for its second year.
Hello please help me with f-1 and f-2. Thank you! Placid Lake Corporation acquired 70 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2017, when Scenic had a net book value of $440,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $7,000 per year. Placid Lake's 2018 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $340,000. Scenic reported net income of $150,000. Placid Lake declared $140,000 in dividends during this period; Scenic paid $44,000. At the end of 2018, selected figures from the two companies' balance sheets were as follows: Placid Lake Scenic Inventory $ 180,000 $ 94,000 Land 640,000 240,000 Equipment (net) 440,000 340,000 During 2017, intra-entity sales of $95,000 (original cost of $50,000) were made. Only 10 percent of this inventory was still held within the consolidated entity at the end of 2017.…
TRW Inc. began business in 2021 and incurred net operating losses for its first 2 years. In 2023, it became profitable. The following amounts are TRW's taxable income before consideration of the NOLs. Recompute TRS's taxable income for 2023 through 2028 after allowable net operating loss deduction. How much of the NOL remains in 2025? 2021 = $(420,000), 2022 = $(358,000), 2023 = $81,000, 2024 = $41,000, 2025 = $210,000, 2026 = $298,000, 2027 = $387,000, 2028 = $905,000 Margaret, a married taxpayer filing a joint return, engaged in two business activities this year. Business A earned $470,000 of profit. Business B incurred a loss of $(995,000). How much of Margaret's net business loss is not currently deductible if the MFJ threshold is $510,000?
In 2017, Rusk Corporation has a net operating loss of $10,000 that Rusk may only carry forward. In 2018, Rusk has a net operating loss of $12,000. In 2019, Rusk generates taxable income of $15,000. Rusk must first use the $10,000 2017 NOL leaving taxable income of $5,000. Rusk may use $4,000 ($5,000 x 80% limit) of the 2018 NOL and will report taxable income of $1,000 for 2019. Question : How much is the remaining 2018 net operating loss that may be carried forward indefinitely, subject to 80% income limit each year?

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