Bundle: Corporate Financial Accounting, Loose-leaf Version, 14th + CengageNOWv2, 1 term Printed Access Card
14th Edition
ISBN: 9781337130691
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Textbook Question
Chapter D, Problem D.14EX
During 20Y8, its first year of operations, Galileo Company purchased two available-for-sale investments as follows:
| Security | Shares Purchased | Cost |
| Hawking Inc | 900 | $44,000 |
| Pavlov Co. | 1,780 | 38,000 |
Assume that as of December 51, 20Y8, the Hawking Inc. stock had a market value of $50 pc-r share, and the Pavlov Co. stock had a market value of $24 per share. Galileo Company had net income of $300,000 and paid no dividends for the year ended December 31, 20Y8. All of the available-for-sale investments are classified as current assets.
- A. Prepare the current assets section of the balance sheet presentation for the available- for-sale investments.
- B. Prepare the
stockholders' equity section of the balance sheet to reflect the earnings and unrealized gain (loss) for the available-for-sale investments.
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PROBLEM 2
On July 1, 2022, LTU Contracting, Inc. purchased a new Peiner SK575 Tower Crane for
a total cost of $875,000. The crane has an estimated useful life of five (5) years. For
financial reporting (book) purposes, the company utilizes straight line depreciation. For
tax purposes, the equipment is depreciated over five years utilizing the 200% declining
balance method.
A. Prepare a table that computes the book and tax depreciation for each year of the
useful life and determine the difference in book value between each method at
the end of each year.
B. On July 1st, 2025, the company is considering selling the crane for $500,000.
Compute what the gain or loss would have been at that time for both book and
tax purposes.
PLEASE HELP AND FILL ALL CELLS
hi expert please help me
Chapter D Solutions
Bundle: Corporate Financial Accounting, Loose-leaf Version, 14th + CengageNOWv2, 1 term Printed Access Card
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