The Financial Statements Of P
The financial statements of P
On July 1, 2016, P Corporation Acquired All The Stock Of S Corporation For
On July 1, 2016, P Corporation acquired all the stock of S Corporation for $42,000 and included S Corporation in its US Consolidated tax return. On the acquisition date, S has accumulated earnings and profits of $14,000. During the period July1-December 31, 2016, S Corporation incurred a taxable loss of $9,000. S Corporation had earnings of $18,000 in 2017, and made a distribution of $5,000 to P Corporation on October 1. A) Determine P’s basis in S stock as of December 31, 2017. B) What are the requirements for S to be included in P Corporation’s US consolidated tax return?
Problem 12-09 Financing Deficit Garlington Technologies Inc.’s 2016 Financial Statements Are Shown Below:
Problem 12-09 Financing Deficit Garlington Technologies Inc.’s 2016 financial statements are shown below: Balance Sheet as of December 31, 2016 Cash $ 180,000 Accounts payable $ 360,000 Receivables 360,000 Notes payable 156,000 Inventories 720,000 Line of credit 0 Total current assets $1,260,000 Accruals 180,000 Fixed assets 1,440,000 Total current liabilities $ 696,000 Common stock 1,800,000 Retained earnings 204,000 Total assets $2,700,000 Total liabilities and equity $2,700,000 Income Statement for December 31, 2016 Sales $3,600,000 Operating costs 3,279,720 EBIT $ 320,280 Interest 18,280 Pre-tax earnings $ 302,000 Taxes (40%) 120,800 Net income 181,200 Dividends $ 108,000 Suppose that in 2017 sales increase by 15% over 2016 sales and that 2017 dividends will increase to $202,000. Forecast the financial statements using the forecasted financial statement method. Assume the firm operated at full capacity in 2016. Use an interest rate of 9%, and assume that any new debt will be added at the end of the year (so forecast the interest expense based on the debt balance at the beginning of the year). Cash does not earn any interest income. Assume that the all new-debt will be in the form of a line of credit. Round your answers to the nearest dollar. Do not round intermediate calculations. Garlington Technologies Inc. Pro Forma Income Statement December 31, 2017 Sales $ Operating costs $ EBIT $ Interest $ Pre-tax earnings $ Taxes (40%) $ Net income $ Dividends: $ Addition to RE: $ Garlington Technologies Inc. Pro Forma Balance Statement December 31, 2017 Cash $ Receivables $ Inventories $ Total current assets $ Fixed assets $ Total assets $ Accounts payable $ Notes payable $ Accruals $ Total current liabilities $ Common stock $ Retained earnings $ Total liabilities and equity $
Big Companies Have Moved Overseas To Pay Less Taxes. Top Corporate U.S. Rates Can
Big companies have moved overseas to pay less taxes. Top corporate U.S. rates can reach 35%, while others are much lower, Ireland’s rate is 12.5%. There are many stakeholders concerned about this issue; the U.S. government, corporate executives, the U.S. labor force (employees), corporate investors just to list a few. Is it okay to move overseas to save tax dollars? Research the issue. Select a stakeholder and a position pro or con. Give a detailed defense of your position. In the subject box, put your stakeholder and if you are for moving or against moving to save tax dollars. (For example: Foreign Country – For Moving)
Question: Question 3 [34 Marks] Dee-Chili Ltd Has Given You These Financial Statements For
Question: Question 3 [34 marks] Dee-Chili Ltd has given you these financial statements for two financial ye…
Exercise 11-26 Nash Inc. Purchased Computer Equipment On March 1, 2017, For $37,820.
Exercise 11-26 Nash Inc. purchased computer equipment on March 1, 2017, for $37,820. The computer equipment has a useful life of 10 years and a salvage value of $1,220. For tax purposes, the MACRS class life is 5 years. Assuming that the company uses the straight-line method for book and tax purposes, what is the depreciation expense reported in (1) the financial statements for 2017 and (2) the tax return for 2017? (Round answer to 0 decimal places, e.g. 5,125.) (1) Depreciation expense reported in the financial statements for 2017 $ (2) Depreciation expense the tax return for 2017 $ Assuming that the company uses the double-declining-balance method for both book and tax purposes, what is the depreciation expense reported in (1) the financial statements for 2017 and (2) the tax return for 2017? (Round answers to 0 decimal places, e.g. 5,125.) (1) Depreciation expense reported in the financial statements for 2017 $ (2) Depreciation expense the tax return for 2017 $
QUESTION 1 [30] The Following 2 Mutually Exclusive Projects (Project Maringa And Project Nelli)
QUESTION 1 [30] The following 2 mutually exclusive projects (Project Maringa and Project Nelli) are available: Year/s Cash Flows (Maringa) Cash Flows (Nelli) 0 -200 000 -20 000 1 18 000 10 000 2 28 000 9 000 3 28 000 10 000 4 300 000 8 000 NB: a. The company requires a rate of return of 15% on its investment. b. Salvage values for the projects are as follows: * Project Maringa R10 000 (sold as scrap). * Project Nelli R1 000 (sold as scrap) 1.1. Applying the payback rule, which project is more lucrative? (5) 1.2. Why would you not use this method as the sole decision tool when making a capital investment decision? Explain. (4) 1.3. If the Accounting Rate of Return (ARR) is used, which project is more viable? (5) 1.4. Determine which project is more lucrative if the NPV rule is applied (show all workings). (14) 1.5. Which method is most reliable? Why? (2)
Assume That The Following Data Relative To Kane Company For 2018 Is Available: Net
Assume that the following data relative to Kane Company for 2018 is available: Net Income $2,890,000 Transactions in Common Shares Change Cumulative Jan. 1, 2018, Beginning number 740,000 Mar. 1, 2018, Purchase of treasury shares (72,000) 668,000 June 1, 2018, Stock split 2-1 668,000 1,336,000 Nov. 1, 2018, Issuance of shares 222,000 1,558,000 6% Cumulative Convertible Preferred Stock Sold at par, convertible into 180,000 shares of common (adjusted for split). $900,000 Stock Options Exercisable at the option price of $25 per share. Average market price in 2018, $30 (market price and option price adjusted for split). 90,000 shares Part 1 Compute weighted average shares outstanding for 2018. Part 2 Compute the basic earnings per share for 2018. (Round answer to 2 decimal places, e.g. 52.75.) Part 3 Compute the diluted earnings per share for 2018. (Round answer to 2 decimal places, e.g. 52.75.)
Exercise 11-2 (Part Level Submission) Bramble Company Acquired A Plant Asset At The
Exercise 11-2 (Part Level Submission) Bramble Company acquired a plant asset at the beginning of Year 1. The asset has an estimated service life of 5 years. An employee has prepared depreciation schedules for this asset using three different methods to compare the results of using one method with the results of using other methods. You are to assume that the following schedules have been correctly prepared for this asset using (1) the straight-line method, (2) the sum-of-the-years’-digits method, and (3) the double-declining-balance method. Year Straight-Line Sum-of-the- Years’-Digits Double-Declining- Balance 1 $9,540 $15,900 $21,200 2 9,540 12,720 12,720 3 9,540 9,540 7,632 4 9,540 6,360 4,579 5 9,540 3,180 1,569 Total $47,700 $47,700 $47,700 What is the cost of the asset being depreciated? Cost of asset $ What amount, if any, was used in the depreciation calculations for the salvage value for this asset? Salvage value $
Management Accounting Question ASSIGNMENT (the Selected Large Company Is Fisher
Management Accounting Question ASSIGNMENT (the selected large company is Fisher
Exercise 11-25 (Part Level Submission) Splish Enterprises Purchased A Delivery Truck On January
Exercise 11-25 (Part Level Submission) Splish Enterprises purchased a delivery truck on January 1, 2017, at a cost of $29,430. The truck has a useful life of 7 years with an estimated salvage value of $6,540. The straight-line method is used for book purposes. For tax purposes, the truck, having an MACRS class life of 7 years, is classified as 5-year property; the optional MACRS tax rate tables are used to compute depreciation. In addition, assume that for 2017 and 2018 the company has revenues of $218,000 and operating expenses (excluding depreciation) of $141,700. MACRS Depreciation Rates by Class of Property Recovery Year 3-year (200% DB) 5-year (200% DB) 7-year (200% DB) 10-year (200% DB) 15-year (150% DB) 20-year (150% DB) 1 33.33 20.00 14.29 10.00 5.00 3.750 2 44.45 32.00 24.29 18.00 9.50 7.219 3 14.81* 19.20 17.49 14.40 8.55 6.677 4 7.41 11.52* 12.49 11.52 7.70 6.177 5 11.52 8.93* 9.22 6.93 5.713 6 5.76 8.92 7.37 6.23 5.285 7 8.93 6.55* 5.90* 4.888 8 4.46 6.55 5.90 4.522 9 6.56 5.91 4.462* 10 6.55 5.90 4.461 11 3.28 5.91 4.462 12 5.90 4.461 13 5.91 4.462 14 5.90 4.461 15 5.91 4.462 16 2.95 4.461 17 4.462 18 4.461 19 4.462 20 4.461 21 2.231 *Switchover to straight-line depreciation. (b) Your answer is incorrect. Try again. Compute taxable income for 2017 and 2018. (Round answers to 0 decimal places, e.g. 45,892.) Taxable income for 2017 $ Taxable income for 2018 $ (c) Determine the total depreciation to be taken over the useful life of the delivery truck for both book and tax purposes. Book purposes $ Tax purposes $
Presented Below Is Information Related To Starr Company. 1. Net Income [including A Discontinued
Presented below is information related to Starr Company. 1. Net Income [including a discontinued operations gain (net of tax) of $72,000] $234,500 2. Capital Structure a. Cumulative 5% preferred stock, $100 par, 6,100 shares issued and outstanding $610,000 b. $10 par common stock, 74,000 shares outstanding on January 1. On April 1, 40,000 shares were issued for cash. On October 1, 16,000 shares were purchased and retired. $1,000,000 c. On January 2 of the current year, Starr purchased Oslo Corporation. One of the terms of the purchase was that if Oslo net income for the following year is $243,000 or more, 50,000 additional shares would be issued to Oslo stockholders next year. Oslo’s net income for the current year was $2,600,000. 3. Other Information a. Average market price per share of common stock during entire year $30 b. Income tax rate Part 1 Compute weighted average shares outstanding.
Exercise 10-9 (Part Level Submission) On July 31, 2017, Headland Company Engaged Minsk Tooling
Exercise 10-9 (Part Level Submission) On July 31, 2017, Headland Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction was begun immediately and was completed on November 1, 2017. To help finance construction, on July 31 Headland issued a $283,200, 3-year, 12% note payable at Netherlands National Bank, on which interest is payable each July 31. $175,200 of the proceeds of the note was paid to Minsk on July 31. The remainder of the proceeds was temporarily invested in short-term marketable securities (trading securities) at 10% until November 1. On November 1, Headland made a final $108,000 payment to Minsk. Other than the note to Netherlands, Headland’s only outstanding liability at December 31, 2017, is a $30,200, 8%, 6-year note payable, dated January 1, 2014, on which interest is payable each December 31. Prepare the journal entries needed on the books of Headland Company at each of the following dates. (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.) (1) July 31, 2017. (2) November 1, 2017. (3) December 31, 2017. Date Account Titles and Explanation Debit Credit 7/3111/112/31 (To record the note.) (To record the payment to Minsk.) 7/3111/112/31 (To record the proceeds from the investment.) (To record the payment to Minsk.) 12/31
The Bonita Corporation Issued 10-year, $5,130,000 Par, 7% Callable Convertible Subordinated Debentures On January
The Bonita Corporation issued 10-year, $5,130,000 par, 7% callable convertible subordinated debentures on January 2, 2017. The bonds have a par value of $1,000, with interest payable annually. The current conversion ratio is 13:1, and in 2 years it will increase to 17:1. At the date of issue, the bonds were sold at 99. Bond discount is amortized on a straight-line basis. Bonita’s effective tax was 40%. Net income in 2017 was $9,950,000, and the company had 1,960,000 shares outstanding during the entire year. (a) Compute both basic and diluted earnings per share. (Round answers to 2 decimal places, e.g. $2.55.) Basic earnings per share= ? Diluted earnings per share= ?
Navidale, A Listed Engineering Company, Manufactures Large Scale Plant And Machinery For Industrial Companies.
Navidale, a listed engineering company, manufactures large scale plant and machinery for industrial companies. Until ten years ago, Navidale Limited pursued a strategy of organic growth. Since then, it has followed an aggressive policy of acquiring smaller engineering companies, which it feels have developed new technologies and methods, which could be used in its manufacturing processes. However, it is estimated that only between 30% and 40% of the acquisitions made in the last ten years have successfully increased the company’s shareholder value. Navidale Limited is currently considering acquiring Lochinvar, an unlisted company, which has three departments. Department A manufactures machinery for industrial companies, Department B produces electrical goods for the retail market, and the smaller Department C operates in the construction industry. Upon acquisition, Department A will become part of Navidale, as it contains the new technologies which Navidale is seeking, but Departments B and C will be unbundled, with the assets attached to Department C sold and Department B being spun off into a new company called Ndege Co. Given below are extracts of financial information for the two companies for the year ended 30 April 2014. Navidale Co Lochinvar Co R Million R Million Sales revenue 790·2 124·6 Profit before depreciation, interest and tax (PBDIT) 244·4 37·4 Interest 13·8 4·3 Depreciation 72·4 10·1 Pre-tax profit 158·2 23·0 Non-current assets 723·9 98·2 Current assets 142·6 46·5 7% unsecured bond – 40·0 Other non-current and current liabilities 212·4 20·2 Share capital (50c/share) 190·0 20·0 Reserves 464·1 64·5 Share of current and non-current assets and profit of Navidale Co’s three departments: Department A Department B Department C Share of current and non-current assets 40% 40% 20% Share of PBDIT and pre-tax profit 50% 40% 10% Other information (i) It is estimated that for Department C, the realisable value of its non-current assets is 100% of their book value, but its current assets’ realisable value is only 90% of their book value. The costs related to closing Department C are estimated to be R3 million. (ii) The funds raised from the disposal of Department C will be used to pay off Lonchivar Co’s other non-current and current liabilities. (iii) The 7% unsecured bond will be taken over by Ndege Co. It can be assumed that the current market value of the bond is equal to its book value. (iv) At present, around 10% of Department B’s PBDIT come from sales made to Department C. (v) Ndege Co’s cost of capital is estimated to be 10%. It is estimated that in the first year of operation Ndege Co’s free cash flows to firm will grow by 20%, and then by 5·2% annually thereafter. (vi) The tax rate applicable to all the companies is 20%, and Ndege Co can claim 10% tax allowable depreciation on its non-current assets. It can be assumed that the amount of tax allowable depreciation is the same as the investment needed to maintain Ndege Co’s operations. (vii) Navidale Co’s current share price is R3 per share and it is estimated that Lochinvar Co’s price-to-earnings (PE) ratio is 25% higher than Navidale Co’s PE ratio. After the acquisition, when Department A becomes part of Navidale Co, it is estimated that Navidale Co’s PE ratio will increase by 15%. (viii) It is estimated that the combined company’s annual after-tax earnings will increase by R7 million due to the synergy benefits resulting from combining Navidale Co and Department A. Required: Estimate, showing all relevant calculations, the maximum premium Navidale Co could pay to acquire Lonchivar Co, explaining the approach taken and any assumptions made (14 marks) Discuss the possible actions Navidale Co could take to reduce the risk that the acquisition of Lochinvar Co fails to increase shareholder value (7marks)
QUESTION 4 [20] Tazz (Pty) Ltd Manufactures Steel Rods And Uses A Standard Costing
QUESTION 4 [20] Tazz (Pty) Ltd manufactures steel rods and uses a standard costing system. The following is the standard variable cost for one of their products: R Material @ R8, 00 per kg 20.00 Labour @ 1.5 hrs 22.50 Variable overheads – varying with hours worked: 1.5 hrs @ R6.00 per hour 9.00 – varying with production 7.00 Budgeted sales 11 700 units Actual results for June 2015 are as follows: Materials purchased 32 000 kg R262 400 Labour Rate per hour R16.00 R304 000 Variable overheads – varying with hours worked R108 300 – varying with production R 78 000 Sales R624 000 Additional information: The budgeted selling price is R50.00 per unit. 1. 12 000 units were manufactured and sold during June 2015. 2. There were no completed units, work in progress or material on hand at the beginning or end of June 2015. Required: Calculate and briefly evaluate the following for June 2015: 4.1 Material price variance. (4) 4.2 Material quantity variance. (4) 4.3 Labour rate variance. (4) 4.4 Labour efficiency variance. (4) 4.5 Selling price variance (4)
What Is The General Journal Entry For The Transaction Expression Of:”First Year Of Advertising
What is the general journal entry for the transaction expression of:”First year of advertising will be approximately $35000. This will be in the budget for the next year.” does this transaction include the account payable, accrued expense, or something else? And also, what do you mean by ” Repayments of the bank loan must be factored into the forecasted income statement.”
Marigold Corporation Earned $262,000 During A Period When It Had An Average Of 100,000
Marigold Corporation earned $262,000 during a period when it had an average of 100,000 shares of common stock outstanding. The common stock sold at an average market price of $15 per share during the period. Also outstanding were 13,500 warrants that could be exercised to purchase one share of common stock for $10 for each warrant exercised. (a) Are the warrants dilutive? (b) Compute basic earnings per share. (Round answer to 2 decimal places, e.g. $2.55.) Basic earnings per share= (c) Compute diluted earnings per share. (Round answer to 2 decimal places, e.g. $2.55.) Diluted earnings per share=
Financial Statement Analysis Case 2 As A New Intern For The Local Branch Office
Financial Statement Analysis Case 2 As a new intern for the local branch office of a national brokerage firm, you are excited to get an assignment that allows you to use your accounting expertise. Your supervisor provides you with the spreadsheet below, which contains data for the most recent quarter for three companies that the firm has been recommending to its clients as “buys.” Each of the companies’ returns on assets has outperformed their industry cohorts in the past. But, given recent challenges in their markets, there is concern that the companies may experience operating challenges and lower earnings. (All numbers in millions, except return on assets.) Company Fair Value of Company Book Value (Net Assets) Carrying Value of Goodwill Return on Assets Sprint Nextel $36,291 $51,171 $30,668 3% Washington Mutual 11,692 23,931 9,112 2% E* Trade Financial 1,635 4,024 2,030 6% (c) Estimate the amount of goodwill impairment for each company and prepare the journal entry to record the impairment. For each company, you may assume that the book value less the carrying value of the goodwill approximates the fair value of the company’s net assets. (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
Accounting, Analysis, And Principles On January 2, 2017, Ayayai Corp. Reported The Following Intangible
Accounting, Analysis, and Principles On January 2, 2017, Ayayai Corp. reported the following intangible assets: (1) copyright with a carrying value of $12,000, and (2) a trade name with a carrying value of $6,000. The trade name has a remaining life of 5 years and can be renewed at nominal cost indefinitely. The copyright has a remaining life of 10 years. At December 31, 2017, Ayayai assessed the intangible assets for possible impairment and developed the following information. Estimated Undiscounted Expected Future Cash Flows Estimated Fair Value Copyright $17,000 $13,000 Trade name 7,500 4,000 Prepare any journal entries required for Ayayai’s intangible assets at December 31, 2017. (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.) Date Account Titles and Explanation Debit Credit Dec. 31 (To record amortization expense) Dec. 31 (To record loss on impairment)
IFRS 12-10 Margaret Avery Company From Time To Time Embarks On A Research
IFRS 12-10 Margaret Avery Company from time to time embarks on a research program when a special project seems to offer possibilities. In 2015, the company expends $325,000 on a research project, but by the end of 2015, it is impossible to determine whether any benefit will be derived from it. The project is completed in 2016, and a successful patent is obtained. The R
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