Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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Chapter 13, Problem 39P
To determine
Prepare an income statement for this organization. The effective tax rate is 20 percent (realization of any tax benefits is anticipated).
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Nissan Corporation is undergoing liquidation. On January 1, 2020 its Statement of Financial Position showed the following accounts:
ASSETS
Cash
P 150,000
Accounts Receivables-net
290,600
Inventory
50,000
Prepaid Expenses
10,400
Building
380,000
Goodwill
80,000
TOTAL
P 961.000
LIABILITIES AND EQUITY
Salaries Payable
P 85,000
Accounts Payable
120,700
Mortgages Payable
428,000
Loan Payable
130,000
Notes Payable
84,300
Ordinary Shares
170,000
Deficit
(57,000)
TOTAL
P961.000
The mortgage payable is secured by the Building having a realizable value of P400,000. Accounts Payable amounting to P75,000 is secured by receivables amounting to P90,600 (P9,900 of which is uncollectible). The balance of receivables which has a realizable value of P187,500 is used to secure the loan payable. Inventory has a realizable value of P41,200. In addition to recorded liabilities are: accrued interest on mortgage payable amounting to P4,280,…
Nissan Corporation is undergoing liquidation. On January 1, 2020 its Statement of Financial Position showed the following accounts:
ASSETS
Cash
P 150,000
Accounts Receivables-net
290,600
Inventory
50,000
Prepaid Expenses
10,400
Building
380,000
Goodwill
80,000
TOTAL
P 961.000
LIABILITIES AND EQUITY
Salaries Payable
P 85,000
Accounts Payable
120,700
Mortgages Payable
428,000
Loan Payable
130,000
Notes Payable
84,300
Ordinary Shares
170,000
Deficit
(57,000)
TOTAL
P961.000
The mortgage payable is secured by the Building having a realizable value of P400,000. Accounts Payable amounting to P75,000 is secured by receivables amounting to P90,600 (P9,900 of which is uncollectible). The balance of receivables which has a realizable value of P187,500 is used to secure the loan payable. Inventory has a realizable value of P41,200. In addition to recorded liabilities are: accrued interest on mortgage payable amounting to P4,280,…
Cadbury Co. began operations in 2020. The following data relates to Cadbury ’s 2020 operations:
Pretax financial income is $1,000,000. The tax rate is 21%.
Cadbury estimates bad debt expense on 2020 accounts receivable was $35,000. Tax does not deduct the bad debts until an accounts receivable is determined to be uncollectible.
Machinery was acquired in January for $500,000. Tax depreciation exceeds GAAP depreciation by 100,000.
Interest received on tax-exempt FloridaState bonds was $30,000.
Prepare the journal entry to record income tax payable, income tax expense, and any deferred taxes for 2020.
Date
Account
Debit
Credit
Chapter 13 Solutions
Advanced Accounting
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