On May 1 Foxtrot Co. agreed to sell the assets of its Footwear Division to Albanese Inc. for $80 million. The sale was completed on December 3t, 2021 The following additional facts pertain to the transaction: The Footwear Division qualifies as a component of the entity according to GAAP regarding discontinued operations. The book value of Footwear's assets totaled $48 million on the date of the sale. Footwear's operating income was a pre-tax loss of $10 million in 2021 .Foxtrot's income tax rate is 25% In the income statement for the year ended December 31, 2021, Foxtrot Co would report Muile Choice Income tees separted tor cortinung and discortinued operations ncome taes reponed for income and geins only None of these answer choices are comect All ncome taxes combined into one line item

On May 1 Foxtrot Co. agreed to sell the assets of its Footwear Division to Albanese Inc. for $80 million. The sale was completed on December 3t, 2021 The following additional facts pertain to the transaction: The Footwear Division qualifies as a component of the entity according to GAAP regarding discontinued operations. The book value of Footwear's assets totaled $48 million on the date of the sale. Footwear's operating income was a pre-tax loss of $10 million in 2021 .Foxtrot's income tax rate is 25% In the income statement for the year ended December 31, 2021, Foxtrot Co would report Muile Choice Income tees separted tor cortinung and discortinued operations ncome taes reponed for income and geins only None of these answer choices are comect All ncome taxes combined into one line item

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On September 1, 2019, Barkeley Co. enters into a tentative agreement to sell the assets of its office equipment division. This division qualifies as a component of the entity according to IFRS regarding discontinued operations. The division's contribution to Barkeley's operating income for 2019 was a $3 million loss before taxes. Barkeley has an average tax rate of 28%. Assume that Barkeley had not yet sold the division's assets by the end of 2019. Further, assume that the fair value less costs to sell of the division's assets at December 31, 2019, was $24 million and was expected to remain the same when the assets are sold in 2020. The book value of the division's assets was $19 million at the end of 2019. Under these assumptions, what would Jacob report in its 2019 income statement regarding the office equipment division? Explain where this information would be presented. [Show your reason based on IFRS standard and your computation]
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On April 1, 2020, Republic Company sold equipment to its wholly owned subsidiary, Barre Corporation, for $40,000. At the time of the transfer, the asset had an original cost (to Republic) of $60,000 and accumulated depreciation of $25,000. The equipment has a five year estimated remaining life. Barre reported net income of $250,000, $270,000 and $310,000 in 2020, 2021, and 2022, respectively. Republic received dividends from Barre of $90,000, $105,000 and $120,000 for 2020, 2021, and 2022, respectively. Assume that Republic uses the cost method to account for its investment in Barre. Compute the [ADJ] consolidating entry necessary for 2021. Select one: a. $155,750 b. $205,000 c. $320,750 d. $165,000 e. $245,750 x Your answer is incorrect. The correct answer is: $155,750
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On September 1, 2021, Jacob Furniture Mart enters into a tentative agreement to sell the assets of its Office Furniture division. This division qualifies as a component of the entity according to GAAP regarding discontinued operations. The division's contribution to Jacob's operating income for 2021 was a $2.70 million loss before income tax. Jacob has an average tax rate of 25%. Assume that Jacob had not yet sold the division's assets by the end of 2021. Further, assume that the fair value less cost to sell of the division's assets at December 31, 2021, was $23.70 million and was expected to remain the same when the assets are sold in 2022. The book value of the division's assets was $18.73 million at the end of 2021. Required: 1. What would Jacob report in its 2021 income statement regarding the Office Furniture division? (Enter your answer in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) 2. What would Jacob report in its 2021 balance sheet…
M On January 1, 2023, Stream Company acquired 21 percent of the outstanding voting shares of Q-Video, Incorporated, for $718,000. Q- Video manufactures specialty cables for computer monitors. On that date, Q-Video reported assets and liabilities with book values of $2.6 million and $768,000, respectively. A customer list compiled by Q-Video had an appraised value of $312,000, although it was not recorded on its books. The expected remaining life of the customer list was six years with straight-line amortization deemed appropriate. Any remaining excess cost was not identifiable with any particular asset and thus was considered goodwill Q-Video generated net income of $284,000 in 2023 and a net loss of $108,000 in 2024 In each of these two years, Q-Video declared and paid a cash dividend of $10,000 to its stockholders During 2023, Q-Video sold inventory that had an original cost of $80,000 to Stream for $160,000. Of this balance, $77,000 was resold to outsiders during 2023, and the…
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