atement and balance sheet under the assumption that the plane had idance. The company's tax rate is 25%. For the income statement, identify with numbers the adjustments for i. Loss on disposal ii. Depreciation iii. Tax expense iv. Net income
atement and balance sheet under the assumption that the plane had idance. The company's tax rate is 25%. For the income statement, identify with numbers the adjustments for i. Loss on disposal ii. Depreciation iii. Tax expense iv. Net income
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
D1.
Account
Transcribed Image Text:In 2019, USP Delivery recorded an impairment loss of $462,000 on its corporate plane. We wish to reformulate the company's income
statement and balance sheet under the assumption that the plane had been used for the prior five years-see Analyst Adjustments 6.2 for
guidance. The company's tax rate is 25%.
a. For the income statement, identify with numbers the adjustments for each of the five years 2015-2019 for:
i. Loss on disposal
ii. Depreciation
iii. Tax expense
iv. Net income
Use a negative sign with your answer to indicate an adjustment decreases the account.
Income Statement Adjustments
2015
2016
2017
2018
Loss on disposal (reversal)
Tax Expense (reversal)
Net Income (reversal)
Depreciation
Tax Expense
Net income (adjustment)
Total net income (reversal + adjustment)
0 x
0 x
0 x
0 x
0 x
0 x
0 x
0 x
0 x
0 x
0 x
Use a negative sign with your answer to indicate an adjustment decreases the account.
Balance Sheet Adjustments
2015
2018
Accumulated depreciation
Deferred tax liability
Retained Earnings
2016
b. For the balance sheet, identify with numbers the adjustments for each of the five years 2015-2019 for:
i. Accumulated depreciation
ii. Deferred tax
iii. Retained earnings
0 x
0 x
0 x
0 x
0 x
0 x
0 x
2017
0 x
0 x
0 x
0 x
0 x
0 x
0 x
0 x
0 x
0 x
2019
(462,000) ✔
0 x
0x
92,400 ✓
0 x
0 x
0 x
2019
0✔
0✔
0 ✓
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