Swifty Corporation's pre-tax accounting income of $748,000 for the year 2023 included the following items:Amortization of identifiable intangibles$142,000Depreciation of building115,000Loss from discontinued operations46,000Unusual, non-recurring gains157,000Profit-sharing payments to employees63,600Ewing Industries Ltd. would like to purchase Swifty. In trying to measure Swifty's normalized earnings for 2023, Ewing determines thatthe building's fair value is triple the book value and that its remaining economic life is double the life that Swifty is using. Ewing wouldcontinue the profit-sharing payments to employees, with the payments being based on income from continuing operations beforeamortization and depreciation.Calculate the 2023 normalized earnings amount of Swifty that Ewing would use to calculate goodwill.Normalized earnings$

Detailed explanation: Swifty's normalized earnings for 2023 were calculated by making adjustments to…

Answered: Swifty Corporation's pre-tax accounting…

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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During 2018, Raines Umbrella Corporation had sales of $738,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $562,000, $99,000, and $133,000, respectively. In addition, the company had an interest expense of $104,000 and a tax rate of 30 percent. (Ignore any tax loss carryback or carryforward provisions.) Assume Raines Umbrella Corporation paid out $17,000 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? Multiple Choice O $77,450 O $44,000 O $94,000 $0 O $19,500
(Working with the income statement) At the end of its third year of operations, the Sandifer Manufacturing Co. had $4,522,000 in revenues, $3,362,000 in cost of goods sold, $458,000 in operating expenses which included depreciation expense of $140,000, and a tax liability equal to 34 percent of the firm's taxable income. Sandifer Manufacturing Co. plans to reinvest $52,000 of its earnings back into the firm. What does this plan leave for the payment of a cash dividend to Sandifer's stockholders? Complete the income statement for Sandifer Manufacturing Co.: (Round to the nearest dollar.) Revenues = Less: Cost of Goods Sold = Less: Operating Expenses Less: Interest Expense Less: Income Taxes = = $ $ $ $ Equals: Gross Profit = ... Equals: Net Operating Income = 0 Equals: Earnings before Taxes Equals: Net Income = = $ GA GA $
Concord Corporation reported the following for 2025: net sales $6,160,000; cost of goods sold $3,686,500; selling and administrative expenses $1,691,000; and an unrealized holding gain on available-for-sale securities $121,500. (a) Prepare a statement of comprehensive income using the one statement format. (Ignore income taxes and earnings per share.) CONCORD CORPORATION Income Statement and Statement of Comprehensive Income $
During 2024, its first year of operations, Baginski Steel Corporation reported a net operating loss of $360,000 for financial reporting and tax purposes. During 2025, Baginski reported income of $200,000 for financial reporting and tax purposes. The enacted tax rate is 25%. Required: - Prepare the journal entry to recognize Baginski's 2025 tax expense or tax benefit. Show the lower portion of the 2025 income statement that reports income tax expense or benefit.
For its fiscal year ending October 31, 2022, Pina Colada Corp. reports the following partial data shown below. Income before income taxes Income tax expense (20% x $382,200) Income from continuing operations Loss on discontinued operations Net income $491,400 76,440 414,960 109,200 $305,760 The loss on discontinued operations was comprised of a $45,500 loss from operations and a $63,700 loss from disposal. The income tax rate is 20% on all items. Prepare a correct statement of comprehensive income, beginning with income before income taxes. PINA COLADA CORP. Partial Statement of Comprehensive Income V V V >
The following information was taken from the records of Blue Inc. for the year 2025: Income tax applicable to income from continuing operations $228,140, income tax applicable to loss on discontinued operations $31,110, and unrealized holding gain on available-for- sale debt securities (net of tax) $18,300. Gain on sale of equipment Loss on discontinued operations Administrative expenses Rent revenue Loss on write-down of inventory Revenues Sales Revenue Rent Revenue Shares outstanding during 2025 were 100,000. Total Revenues Expenses Cost of Goods Sold Selling Expenses Administrative Expenses Prepare a single-step income statement (with respect to items in Income from operations). (Round earnings per share to 2 decimal places, e.g. 1.48. Enter other revenue and gains before other expenses and losses) Total Expenses Income from Operations Other Revenues and Gains Gain on Sale of Equipment Other Expenses and Losses Inventory Loss Income before Income Tax Income Tax Income from…
In its proposed 2022 income statement, Swifty Corporation reports income before income taxes $775,000, income taxes $155,000 (not including unusual items), loss on operation of discontinued music division $93,000, gain on disposal of discontinued music division $62,000, and unrealized loss on available-for-sale securities $232,500. The income tax rate is 20%. Prepare a correct statement of comprehensive income, beginning with income before income taxes. SWIFTY CORPORATIONPartial Statement of Comprehensive Income
At the end of 2021, Schrutte Inc. in its first year of operations, had pretax financial income of $650,000. The company had extra depreciation taken for tax purposes in the amount of $975,000. Estimated expenses that were deducted for financial income but not yet paid amounted to $425,000. It is estimated that the expenses will be paid in 2022. The tax rate for all years is 25% Which of the following items are included in the journal entry at the end of the year? Question 13 options: a) credit deferred tax liability by $106,250. b) debit Income Tax Expense by $162,500 c) debit Deferred Tax Asset by 243,750. d) credit to Income Tax Payable account by $100,000.
The pretax financial income (or loss) figures for Metlock Company are as follows. 2022 $77,000 2023 (49,000) 2024 (44,000) 2025 125,000 2026 95,000 Pretax financial income (or loss) and taxable income (loss) were the same for all years involved. Assume a 20% tax rate for all years. Prepare the journal entries for the years 2022 to 2026 to record income tax expense and the effects of the net operating loss carryforwards. All income and losses relate to normal opèrations. (In recording the benefits of a loss carryforward, assume that no valuation account is deemed necessary.) (List all debit entries before credit entries. 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 O for the amounts. Record journal entries in the order presented in the problem.)
Barb's Bait Corporation has operating income of $0.95 million, a loss on sale of investments of $125,000, and income tax expense of $237,500 for the year ended December 31, 2024, before considering the following item: a $200,000 gain, after tax, from the disposal of an operating segment. Required: Prepare the 2024 multiple step income statement for Barb's Bait Corporation beginning with operating income. (Enter your answer in dollars, not millions. (i.e., $5.5 million should be entered as 5,500,000).) Operating income Income before tax BARB'S BAIT CORPORATION Income Statement For the Year Ended December 31, 2024 Discontinued operation: $ 950,000
Rochester inc had pretax accounting income of 2,700,000 and a tax rate of 20% in 2025 during its first year of operation. Following transactions Received advance rent from pack co for 2026: $96000 Received municipal bond interest $120000 Claimed depreciation for tax purposes in excess of book depreciation $60000 Reported installment sales rev on financial statements in 2025; not recognized for tax purposes until received in 2026: $162000 How much is current tax expense for 2025?
The following information relates to Sandhill Corporation's transactions during 2023, its first year of operations. 1. 2. 3. 4. 5. 6. Income before income tax on the income statement for 2023 was $56,000. Income before income tax ($56,000 above) is net of a loss due to the writedown of land of $48,000. Sandhill reported a tax-deductible financing charge of $6,300 on its 2023 statement of retained earnings. The charge is for interest on a financial instrument that is legally debt, but in substance is equity for financial reporting purposes. The tax rate enacted for 2023 and future years is 30%. Because this was Sandhill's first taxation year, no instalments on account of income taxes were required or paid by Sandhill. Differences between the 2023 GAAP amounts and their treatment for tax purposes were as follows: a. Warranty expense accrued for financial reporting purposes amounted to $16,000. Warranty payments deducted for taxes amounted to $12,800. Warranty liabilities were classified…

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