Headland Inc. incurred a net operating loss of $503,000 in 2025. The tax rate for all years is 30%. Assume that it is more likely than not that the entire net operating loss carryforward will not be realized in future years. Prepare all the journal entries necessary at the end of 2025. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit (To record carryforward)

Headland Inc. incurred a net operating loss of $503,000 in 2025. The tax rate for all years is 30%. Assume that it is more likely than not that the entire net operating loss carryforward will not be realized in future years. Prepare all the journal entries necessary at the end of 2025. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit (To record carryforward)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter4: The Balance Sheet And The Statement Of Shareholders' Equity

Section: Chapter Questions

Problem 5C: It is February 16, 2020, and you are auditing Davenport Corporation's financial statements for 2019...

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It is February 16, 2020, and you are auditing Davenport Corporation's financial statements for 2019 (which will be issued in March 2020). You read in the newspaper that Travis Corporation, a major customer of Davenport, is in financial difficulty. Included in Davenports accounts receivable is 50,000 (a material amount) owed to it by Travis. You approach Jim Davenport, president, with this information and suggest that a reduction of accounts receivable and recognition of a loss for 2019 might be appropriate. Jim replies, Why should we make an adjustment? Ted Travis, the president of Travis Corporation, is a friend of mine; he will find a way to pay us, one way or another. Furthermore, this occurred in 2020, so lets wait and see what happens; we can always make an adjustment later this year. Our 2019 income and year-end working capital are not that high; our creditors and shareholders wouldnt stand for lower amounts than they already are. Required: From financial reporting and ethical perspectives, prepare a response to Jim Davenport regarding this issue.
Splish Inc. incurred a net operating loss of $515,000 in 2025. The tax rate for all years is 20%. Prepare the journal entries to record the benefits of the loss carryforward. Splish expects to return to profitability in 2026. (List debit entry before credit entry. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter o for the amounts) Account Titles and Explanation Debit Credit
Carla Inc. incurred a net operating loss of $531,000 in 2025. The tax rate for all years is 30%. Prepare the journal entries to record the benefits of the loss carryforward. Carla expects to return to profitability in 2026. (List debit entry before credit entry. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
Pearl Inc. incurred a net operating loss of $455,000 in 2020. The tax rate for all years is 20%. Assume that it is more likely than not that the entire net operating loss carryforward will not be realized in future years. Prepare all the journal entries necessary at the end of 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Bridgeport Inc. incurred a net operating loss of $477,000 in 2020. The tax rate for all years is 20%. Prepare the journal entries to record the benefits of the loss carryforward. Bridgeport expects to return to profitability in 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount
Sandhill, Inc., changed from the LIFO cost flow assumption to the FIFO cost flow assumption in 2020. The increase in the prior year's income before taxes is $1,127,000. The tax rate is 20%. Prepare Sandhill's 2020 journal entry to record the change in accounting principle. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit
Sanders Incorporated is a small brick manufacturer that uses the direct write-off method to account for uncollectible accounts. At the end of 2024, its balance for Accounts Receivable is $44,000. The company estimates that of this amount, $5,800 is not likely to be collected in 2025. In 2025, the actual amount of bad debts is $3,900. Record, if necessary, an adjusting entry for estimated uncollectible accounts at the end of 2024 and the actual bad debts in 2025. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
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Bonita, Inc., changed from the LIFO cost flow assumption to the FIFO cost flow assumption in 2025. The increase in the prior year's income before taxes is $1,300,500. The tax rate is 20%. Prepare Bonita's 2025 journal entry to record the change in accounting principle. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation eTextbook and Media Debit Credit
Kagome Company uses the allowance method of accounting for uncollectible accounts. During 2020, Kagome had charged P800,000 to bad debt expense, and wrote off accounts receivable of P900,000 as uncollectible. What was the decrease in working capital as a result of these entries?
On January 31, 2020, Allison company wrote off and uncollectible accounts of $8500. The company uses the allowance method for bad debts. The write off would cause total current assets to be? A decreased by $8,500, Increased by $8500 increase by $17,000 or will it remain the same amount?
Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31, the company’s fiscal year-end. The 2020 balance sheet disclosed the following: Current assets: Receivables, net of allowance for uncollectible accounts of $44,000 $ 502,000 During 2021, credit sales were $1,820,000, cash collections from customers $1,900,000, and $53,000 in accounts receivable were written off. In addition, $4,400 was collected from a customer whose account was written off in 2020. An aging of accounts receivable at December 31, 2021, reveals the following: Percentage of Year-End Percent Age Group Receivables in Group Uncollectible 0−60 days 65 % 4 % 61−90 days 15 10 91−120 days 15 30 Over 120 days 5 50 Required:1. Prepare summary journal entries to account for the 2021 write-offs and the collection of the receivable previously written off.2. Prepare the…