FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Red Corporation was formed in 2016. In that year, it had a net capital loss of $2,000. In 2017, it had a net
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$6,000. |
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$4,000. |
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$9,000. |
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$0. |
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- Kingbird Inc. reported income from continuing operations before taxes during 2017 of $2,250,000. Additional transactions Occurring in 2017 but not considered in the $2,250,000 are as follows. A gain of $125,000 (pretax) as a result of selling securities from its investment portfolio. A$27,000 loss before taxes as a result of operating the discontinued clothing division during 2017. A loss of $78,000 before taxes as a result of disposing of its clothing division. Assume that this transaction meets the criteria for discontinued operations. An uninsured $122,000 loss due to a fire. At the beginning of 2015, the corporation purchased a machine for $260,000 (salvage value of $20,000) that had a useful life of 10 years. The bookkeeper used straight-line depreciation for 2015, 2016, and 2017, but failed to deduct the salvage value in computing the depreciation base. The corporation decided to change its method of inventory pricing from average-cost to the FIFO method. The effect of this…arrow_forwardCentral Bank has the following information (in $million). 2017 ($ million) 2018 ($ million) Revenue 780 890 Net income 240 375 Assets 22,450 27,850 Equity 2,250 2,980 Which of the following statements about Central Bank is CORRECT? Select one: a. From 2017 to 2018, its Return on Equity decreased, Return on Assets decreased, and Leverage Multiplier increased. b. From 2017 to 2018, its Return on Equity increased, Return on Assets increased, and Leverage Multiplier decreased. c. From 2017 to 2018, its Return on Equity increased, Return on Assets increased, and Leverage Multiplier increased. d. From 2017 to 2018, its Return on Equity increased, Return on Assets decreased, and Leverage Multiplier increased.arrow_forwardThe 2021 Income statement for Egyptian Nolse Blasters shows that depreciation expense is $80 million, NOPAT is $239 million. At the end of the year, the balance of gross fixed assets was $650 million. The change in net operating working capital during the year was $70 million. Egyptian's free cash flow for the year was $180 million. Calculate the beginning-of-year balance for gross fixed assets. (Enter your answer in millions of dollars.) Gross fixed assets millionarrow_forward
- Orange Corporation was formed in 2017. In that year it had a net operating loss of $2,000. In 2018, it had a net income of $5,000. In 2019, the company reported a net operating loss of $9,000. What is the amount of net operating loss carryforward to 2020, if any? $9,000. $4,000. $0. $6,000.arrow_forwardSee the explanation below to work the problem. XYZ Company, a 'for-profit' business, had revenues of $12 million in 2022. Expenses other than depreciation totaled 75 percent of revenues. XYZ Company, must pay taxes at a rate of 40 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 $1.5 million; however, a change in the depreciation schedule (still within GAAP) has now made the depreciation expense DOUBLE. Based on this change in depreciation expense, what would XYZ's net income now be? Select one or more: a. so b. $3,000,000 c. $1,500,000 Od. Not enough information to tellarrow_forwardASAP!! Assume that today is December 31, 2015, and the following information applies to Vermeil Airlines: • After-tax operating income [EBIT(1 T), also called NOPAT] for 2016 is expected to be $500 million.• The depreciation expense for 2016 is expected to be $100 million.• The capital expenditures for 2016 are expected to be $200 million.• No change is expected in net operating working capital.• The free cash flow is expected to grow at a constant rate of 6 percent per year.• The required return on equity is 15 percent.• The WACC is 12 percent.• The market value of the company’s debt is $3.2 billion.• 200 million shares of stock are outstanding.Using the free cash flow approach, what should the company’s stock price be today?arrow_forward
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