19) Plock Corporation, the 75% owner of SeraphimCompany, reported net income of $400,000 in 2011,prior to recording any income from Seraphim.Seraphim reported net income for that same year of$80,000 on their stand-alone statements. During 2011,an intercompany sale of a vehicle resulted in a gain of$4,000, and the vehicle was assumed to have a four-year remaining useful life. The vehicle has no salvagevalue. Straight-line depreciation is used.Required:1. Assuming that the vehicle transfer was downstream,calculate Plock's consolidated net income for 2011, andcontrolling share of consolidated net income for 2011.2. Assuming that the vehicle transfer was upstream,calculate Plock'

When a company purchases the majority of shares of another company then it is known as an…

Required: 1. Assuming that the vehicle transfer was downstream, calculate Plock's consolidated net income for 2011, and controlling share of consolidated net income for 2011. 2. Assuming that the vehicle transfer was upstream, calculate Plock'

Required: 1. Assuming that the vehicle transfer was downstream, calculate Plock's consolidated net income for 2011, and controlling share of consolidated net income for 2011. 2. Assuming that the vehicle transfer was upstream, calculate Plock'

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter14: Choice Of Business Entity—operations And Distributions

Section: Chapter Questions

Problem 35P

See similar textbooks

Similar questions

On December 31, 2016, the end of the fiscal year, California Microtech Corporation completed the sale of its semiconductor business for $10 million. The business segment qualifies as a component of the entity according to GAAP. The book value of the assets of the segment was $8 million. The loss from operations of the segment during 2016 was $3.6 million. Pretax income from continuing operations for the year totaled $5.8 million. The income tax rate is 30%. Prepare the lower portion of the 2016 income statement beginning with pretax income from continuing operations. Ignore EPS disclosures.
During 2017, Liselotte Company reported income of$1,500,000 before income taxes and realized a gain of$450,000 on the disposal of assets related to a discontinuedoperation. The criteria for classification as a discontinued operation is appropriate for this sale. The income issubject to income taxation at the rate of 34%. The gainon the sale of the plant is taxed at 30%. Indicate anappropriate presentation of these items in the incomestatement.
At the beginning of 2015, Pitman Co. purchased as asset for $1,200,000 with an estimated useful life of 5 years and an estimated salvage value of $200,000. For financial reporting purposes the asset is being depreciated using the straight-line method; for tax purposes the double-declining-balance method is being used. Pitman Co.'s tax rate is 40% for 2015 and all future years. At the end of 2015, what are the book basis and the tax basis of the asset? Book basis Tax basis a. 1,000,000 620,000 b. 980,000 620,000 c. 980,000 720,000 d. 1,000,000 720,000 At the end of 2015. which of the following deferred tax accounts and balances is reported on Pitman's balance sheet? Account Balance a. Deferred tax asset 136,000 b. Deferred tax liability 136,000 c. Deferred tax asset 112,000 d. Deferred tax liability 112,000
A Ltd purchased four motor vehicles for $50000 each on 1/1/2015. The company depreciates motor vehicles on a straight-line basis. Their expected useful life is six years.Each motor vehicle has a residual value of $5000. For tax purposes, the motor vehicles depreciate at 20% per annum on a straight-line basis. Accounting profit before tax (PBT) for the years 2015 to 2020 is $60000 per annum. The tax rate is 12.5%. Required Calculations of current and deferred tax Related figures to be included in the financial statements for the years 2015 to 2020
The following information relates to Hardin Limited's year-ended 31 December 2020: The statement of comprehensive income shows profit for the year of R154 000. The calculation of this profit included the following income and expenses: Impairment of building: R64 000 (before tax: R74 000) Profit on sale of plant: R23 200 (before tax: R32 000) • Inventory write-down: R10 000 (before tax: R15 000) • The statement of changes in equity reflected preference dividends of R3 450. 12 000 shares in issue throughout the year. Required: Calculate the basic earnings and the headline earnings and disclose the headline earnings per share for the year-ended 31 December 2020 The following information is provided for Present limited for the year ended 31 December 2020. Present Limited had basic earnings for 2020 of R520 000. This basic eamings figure was equal to its profit for the year. It had no components of other comprehensive income. Present Limited had 2 200 000 ordinary shares in issue throughout…
On January 1, 2017, Server Company purchased a machine with an expected economic life of five years. On January 1, 2019, Server sold the machine to Patron Corporation and recorded the following entry: Cash 45,000 Accumulated Depreciation 28,000, Machine 70,000, Gain on Sale of Equipment 3,000. Patron Corporation holds 75 percent of server's voring shares.Server reported a net income of $50,000, and Patron reported income from its own operations of 100,000 for 2019/. There is no change in the economic life of the equipement as a result of the intercorporate tranfer. Based on the preceding information, in the preparation of the 2019 consolidated balance sheet, the machine will be : Debited for 25,000, Credited for 45,000, debited for 1,000, debited for 15,000
Pacman Ltd commenced business in 2015. For the year-ending 31/12/2016, they incur a loss of $2.2 million. It is not anticipated that there will be further losses as the company becomes more established in the market and will generate taxable profit in subsequent years. Profits before tax for subsequent years are: 2017: $560,000 2018: $890,000 2019: $970, 000 There are no temporary differences between carrying value of assets or liabilities. Tax rate is 30%. Prepare journal entries for 2017, 2018 and 2019
LOVE INC. has a policy of using non-current assets until they can no longer operate and are worthless. On January 1, 2015, it acquired an item of plant and machinery for P100,000. It is being depreciated over 10 years on a straight-line basis. For tax purposes, there is an allowance of 20% per annum on a reducing balance basis. There are two rates of tax: 15% on trading profits and 25% on gains on disposals.What deferred tax balance should LOVE recognized at December 31, 2015, according to PAS 12 Income taxes? a. Deferred tax asset of P2,500b. Deferred tax asset of P1,500c. Deferred tax liability of P2,500 d. Deferred tax liability of P1,500.
Jersey Corporation, which has a calendar year accounting period, purchased a machine for $400,000 on April 1, 2016. At that time Jersey expected to use the machine for nine years and then sell it for $4,000. The machine was sold for $22,000 on Sept. 30, 2021. Assuming straight-line depreciation, calculate the gain(/(loss) at the sale of the machine.
On January 1, 2013, Ameen Company purchased a building for $36 million. Ameen uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. At December 31, 2015, the book value of the building was $30 million and its tax basis was $20 million. At December 31, 2016, the book value of the building was $28 million and its tax basis was $13 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2016 was $45 million. Required: 1. Prepare the appropriate journal entry to record Ameen’s 2016 income taxes. Assume an income tax rate of 40%. 2. What is Ameen’s 2016 net income?
During 2018, Raines Umbrella Corporation had sales of $749,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $576,000, $101,000, and $131,000, respectively. In addition, the company had an interest expense of $99,000 and a tax rate of 40 percent. (Ignore any tax loss carryback or carryforward provisions.) Assume Raines Umbrella Corporation paid out $16,000 in cash dividends. If spending on net fixed assets and net working capital was zero, and if no new stock was issued during the year, what is the firm's net new long-term debt?
Orton Corporation, which has a calendar year accounting period, purchased a new machine for $80,000 on April 1, 2016. At that time Orton expected to use the machine for nine years and then sell it for $8,000. The machine was sold for $44,000 on Sept. 30, 2021. Assuming straight-line depreciation, no depreciation in the year of acquisition, and a full year of depreciation in the year of retirement, the gain to be recognized at the time of sale would be: