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At the begining of 2019, Cameron Company’s
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- Koolman Construction Company began work on a contract in 2019. The contract price is 3,000,000, and the company determined that its performance obligation was satisfied over time. Other information relating to the contract is as follows: Required: 1. Compute the gross profit or loss recognized in 2019 and 2020. 2. Prepare the appropriate sections of the income statement and ending balance sheet for each year.arrow_forwardRode Inc. incurred a net operating loss of $500,000 in 2020. Combined income for 2018 and 2019 was $350,000. The tax rate for all years is 20%. Prepare the journal entries to record the benefits of the loss carryforward.arrow_forwardAt 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% In the journal entry at the end of the year that records income tax expense, deferred taxes and income taxes payable, what is the entry to the Income Tax Payable account? Question 19 options: a) credit Income Tax Payable account by $162,500 b) credit Income Tax Payable account by $300,000. c) credit to Income Tax Payable account by $25,000. d) credit Income Tax Payable account by $512,500.arrow_forward
- XYZ Company, a 'for-profit' business, had revenues of $60 million in 2019. Expenses other than depreciation totaled 55 percent of revenues, and depreciation expense was $5.0 million. XYZ Company, must pay taxes at a rate of 25 percent of pretax (operating) income. All revenues were collected in cash during the year, and all expenses other than depreciation were paid in cash. Depreciation originally was $5 million; however, now the company has decided to be more conservative in its depreciation of its capital assets. XYZ now has $2.5 million in depreciation expense instead of $5 million. Based on this change in depreciation expense, what would XYZ's total profit margin Please don't provide solutions in imagearrow_forwardSweet Inc. incurred a net operating loss of $489,000 in 2020. The tax rate for all years is 20%. Prepare the journal entries to record the benefits of the loss carryforward. Sweet expects to return to profitability in 2021.arrow_forwardAccording to its 2019 Income Statement, The Legendary Corporation had the following operating results: EBIT of $19,810, Depreciation Expense of $2,340, Interest Expense of $11,750, the firm is subject to a Corporate Tax Rate of 20 percent. At the beginning of the year, the firm registered Net Fixed Assets of $12,300, and Net Working Capital that amounted to $2,970. At the end of the year, the firm declared Net Fixed Assets of $15,000, Current Assets of $5,000, and Current Liabilities of $1,830. (All units are in thousands). What was The Legendary Corporation’s Cash Flow from Assets (CFFA) for 2019?arrow_forward
- On November 1, 2019, Holiday, Inc. received $16,000 that it would earn over the next 16 months. Which of the following correctly states the 2020 annual financial statements? Unearned revenue of $0; revenue of $16,000 O Unearned revenue of $2,000; revenue of $12,000 Unearned revenue of $2,000; revenue of $14,000 O Unearned revenue of $4,000; revenue of $12,000 Unearned revenue of $0; revenue of $0arrow_forwardAt 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.arrow_forwardAgassi Corporation is preparing the comparative financial statements to be included in the annual report to shareholders. Agassi employs a fiscal year ending May 31. Income before income tax for Agassi was P1,400,000 and P660,000 respectively for fiscal year ended May 31, 2019 and 2018. Agassi experienced a loss from discontinued operations of P400,000 in March2018. A 40% combined income tax rate pertains to any and all of Agassi Corporation’s profits, gains, and losses. Agassi’s capital structure consists of preference shares and ordinary shares. The company has not issued any convertible securities or warrants and there are no outstanding share options. Agassi issued 40,000 shares of P100 par value, 6% cumulative preference shares in 2018. All of these shares are outstanding, and no preference dividends are in arrears. There were 1,000,000 shares of P1 par ordinary shares outstanding on June 1, 2017. On September 1, 2017, Agassi sold an additional 400,000 ordinary shares at P17 per…arrow_forward
- Flounder Corp. has income from continuing operations of $246,500 for the year ended December 31, 2022. It also has the following items (before considering income taxes). 1. An unrealized loss of $68,000 on available-for-sale securities. 2. A gain of $25,500 on the discontinuance of a division (comprised of a $8,500 loss from operations and a $34,000 gain on disposal). Assume all items are subject to income taxes at a 20% tax rate.Prepare a statement of comprehensive income, beginning with income from continuing operations. FLOUNDER CORP.Partial Statement of Comprehensive Incomechoose the accounting period For the Year Ended December 31, 2022December 31, 2022For the Month Ended December 31, 2022 select a comprehensive income item DividendsExpensesNet Income / (Loss)Retained EarningsRevenueTotal ExpensesTotal RevenuesIncome Tax ExpenseIncome Before…arrow_forwardAt December 31, 2022, Cracker Company reported Retained Earnings of $20,000,000. In 2023, Cracker determined that 2021 amortization expense was understated by $1,500,000. In 2023, net income was $6,900,000 and dividends declared were $2,250,000. The company’s tax rate is 20%. Cracker issues comparative income statements and statements of stockholder’s equity for 2022, and 2023. Which of the following statements is true regarding the reporting for this error on Cracker Company’s comparative statements of stockholders’ equity? Answer a. The beginning balance of 2022 retained earnings will be increased for the correction of the error by $1,500,000. b. No adjustment to retained earnings for 2022 or 2023 is necessary because the error occurred in 2021. c. The beginning balance of 2022 retained earnings will be decreased for the correction of the error by $1,200,000. d. The beginning balance of 2023 retained earnings will be decreased for the correction of the…arrow_forwardCelia Corp. has estimated that total depreciation expense for the year ending 12/31/20 will amount to $600,000, and that 2020 year-end bonuses to employees will total $1,200,000. In Celia's interim income statement for the six months ended 6/30/20, what is the total amount of expense relating to these two items that should be reported? a. $0. b. $300,000. c. $900,000. d. $1,800,000.arrow_forward
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage LearningCornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning