ON 11.Sparky Company is preparing its 2016 fnancial statements. IncomeFrom Continuing Operations (ICO) For 2016 was determined to be$1,000,000, but upon Further review, Sparky’s bookkeeper is not certain thisnumber is accurate.
ON 11.Sparky Company is preparing its 2016 fnancial statements. IncomeFrom Continuing Operations (ICO) For 2016 was determined to be$1,000,000, but upon Further review, Sparky’s bookkeeper is not certain thisnumber is accurate.During 2016, Sparky declared preFerred dividends oF $70,000, paid $90,000For dividends, and received $135,000 For dividends on available-For-saleequity securities. The bookkeeper did not include any oF these whencalculating ICO.Determine the ADJUSTMENT to Sparky’s Income From Continuing Operations(ICO) For this item. Sparky has a corporate tax rate oF 30%.IF you need to increase ICO, enter your answer as a positive number; Forinstance: 3000IF you need to decrease ICO, enter your answer as a negative number; Forinstance: -3000IF you determine no change is needed to ICO; enter 01.5 points QUESTION 21.Over the past 4 years, SPARKY has estimated bad debts based on 3.5%oF credit sales. On May 1, 2016, aFter reviewing their major client’s creditworthiness, they decided to change this estimate to 4.75%. IF Sparky hadused the 4.75% in the past, bad debt expenses would be $150,000 higher inprior years. During fscal 2016, Sparky had earned sales revenues oF$2,750,000 oF which 20% were cash sales and 80% were credit sales. Thebookkeeper calculated bad debt expenses For 2016 using the 3.5%.Determine the ADJUSTMENT to Sparky’s Income From Continuing Operations(ICO) For this item. Sparky has a corporate tax rate oF 30%.IF you need to increase ICO, enter your answer as a positive number; Forinstance: 3000IF you need to decrease ICO, enter your answer as a negative number; Forinstance: -3000IF you determine no change is needed to ICO; enter 01.5 points QUESTION 31.On April 1, 2014, Sparky purchased a truck For $50,000 with a salvagevalue oF $7,000 and useFul liFe oF 5 years which was depreciated using thestraight line method. On October 1, 2016, Sparky decided to change thesalvage to $3,630 and a total useFul liFe oF 9 years. The bookkeeper has notrecorded any depreciation on the truck For 2016.Determine the ADJUSTMENT to Sparky’s Income From Continuing Operations(ICO) For this item. Sparky has a corporate tax rate oF 30%.IF you need to increase ICO, enter your answer as a positive number; Forinstance: 3000IF you need to decrease ICO, enter your answer as a negative number; Forinstance: -3000IF you determine no change is needed to ICO; enter NE.1.5 points
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