Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Question
Chapter 5, Problem 1P
1.
To determine
Prepare the
2.
To determine
Prepare a multiple-step income statement of Company W for the year 2019.
3.
To determine
Show the way in which W Division would be reported on Company W’s December 31, 2019, balance sheet.
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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]
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…
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 $3 million loss
before income tax. Jacob has an average tax rate of 25%.
Assume that Jacob had not yet sold the Office Furniture division 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 $12 million and was expected to
remain the same when the assets are sold in 2022. The book value of the division's assets was $19 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 regarding…
Chapter 5 Solutions
Intermediate Accounting: Reporting And Analysis
Ch. 5 - In general, how does the income statement help...Ch. 5 - Prob. 2GICh. 5 - Define income under the capital maintenance...Ch. 5 - Prob. 4GICh. 5 - What is net income?Ch. 5 - What three things must a company determine to...Ch. 5 - Prob. 7GICh. 5 - Prob. 8GICh. 5 - Give an example and explanation for each of the...Ch. 5 - Define expenses. What do expenses measure?
Ch. 5 - Prob. 11GICh. 5 - Define gains and losses. Give examples of three...Ch. 5 - Prob. 13GICh. 5 - What items are included in a companys income from...Ch. 5 - How are unusual or infrequent gains or losses...Ch. 5 - What is interperiod tax allocation?Ch. 5 - Prob. 17GICh. 5 - Prob. 18GICh. 5 - Prob. 19GICh. 5 - Prob. 20GICh. 5 - Prob. 21GICh. 5 - Prob. 22GICh. 5 - Prob. 23GICh. 5 - Prob. 24GICh. 5 - Prob. 25GICh. 5 - Prob. 26GICh. 5 - Prob. 27GICh. 5 - Prob. 28GICh. 5 - Prob. 29GICh. 5 - Prob. 30GICh. 5 - What is the rate of return on common equity? What...Ch. 5 - Prob. 32GICh. 5 - Prob. 33GICh. 5 - Which of the following is expensed under the...Ch. 5 - The following information is available for Cooke...Ch. 5 - The following information is available for Wagner...Ch. 5 - Prob. 4MCCh. 5 - A loss from the sale of a component of a business...Ch. 5 - In a statement of cash flows, receipts from sales...Ch. 5 - Brandt Corporation had sales revenue of 500,000...Ch. 5 - Refer to RE5-1. Prepare a single-step income...Ch. 5 - Shaquille Corporation began the current year with...Ch. 5 - Dorno Corporation incurred expenses during the...Ch. 5 - Niler Corporation reported the following after-tax...Ch. 5 - Jordan Corporation reported retained earnings of...Ch. 5 - Prob. 7RECh. 5 - Prob. 8RECh. 5 - Amelias Bookstore reported net income of 62,000...Ch. 5 - Prob. 10RECh. 5 - Prob. 1ECh. 5 - Cost of Goods Sold and Income Statement Schuch...Ch. 5 - Income Statement Calculation OConnor Companys...Ch. 5 - Results of Discontinued Operations On November 30,...Ch. 5 - Multiple-Step and Single-Step In coin Statements...Ch. 5 - Prob. 6ECh. 5 - Multiple-Step and Single-Step Income Statements,...Ch. 5 - Cost of Goods Sold, Income Statement. and...Ch. 5 - Net Cash Flow from Operating Activities The...Ch. 5 - Prob. 10ECh. 5 - Statement of Cash Flows The following items...Ch. 5 - Statement of Cash Flows The following are several...Ch. 5 - Classifications Where would each of the following...Ch. 5 - Rate of Change nalyses eiher Company presents the...Ch. 5 - Prob. 15ECh. 5 - Prob. 16ECh. 5 - Income Statement and Retained Earnings Huff...Ch. 5 - Prob. 18ECh. 5 - Interim Reporting (Appendix 5.1) Miller Company...Ch. 5 - Prob. 1PCh. 5 - Prob. 2PCh. 5 - Income Statement, Lower Portion Cunningham Company...Ch. 5 - Financial Statement Violations of U.S. GAAP The...Ch. 5 - Misclassiflcations Rox Corporations multiple-step...Ch. 5 - Misclassifications Olson Companys bookkeeper...Ch. 5 - Complex Income Statement The following items were...Ch. 5 - Prob. 8PCh. 5 - Financial Statement Deficiencies The following is...Ch. 5 - Comprehensive: Balance Sheet from Statement of...Ch. 5 - Net Income and Comprehensive Income At the...Ch. 5 - Statement of Cash Flows A list of Fischer Companys...Ch. 5 - Statement of Cash Flows The following are Mueller...Ch. 5 - Prob. 14PCh. 5 - Rate of Change Analyses and Ratios Analyses The...Ch. 5 - Comprehensive: Income Statement and Retained...Ch. 5 - Comprehensive: Income Statement and Supporting...Ch. 5 - Prob. 18PCh. 5 - Prob. 19PCh. 5 - Prob. 20PCh. 5 - Prob. 1CCh. 5 - Prob. 2CCh. 5 - Prob. 3CCh. 5 - Prob. 4CCh. 5 - Nonrecurring Items Lynn Company sells a component...Ch. 5 - Prob. 6CCh. 5 - Accrual Accounting GAAP requires the use of...Ch. 5 - Ethics and Sale of Operating Component It is the...Ch. 5 - Analyzing Starbuckss Income Statement and Cash...Ch. 5 - Prob. 11C
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