1) Precision Corporation had the following income statement prepared by a new accounting intern for the fiscal year ended December 31, 2020. The management of Precision is concerned that it was not prepared in accordance with generally accepted accounting principles. Precision is a private corporation reporting under ASPE. Precision Corporation Income Statement December 31, 2020 Sales $1,500,000 Interest Revenue 45,000 Issue of Common Shares for Cash 155,000 Total Revenues $1,700,000 Less: Cost of Goods Sold $825,000 Operating Expenses 340,000 Cash Dividends Declared on Common Shares 120,000 Total Expenses 1,285,000 Net Gain $ 415,000 Additional Information: 1. The balance of Retained Earnings was $472,000 on January 1st, 2020. 2. Precision had a profit from discontinued operations of $70,000 and a loss on the disposal of assets of the discontinued operations of $40,000 during 2020. 3. It was discovered that sales had been overstated by $100,000 in 2019. 4. The corporate income tax rate is 50%. Instructions: 1. Prepare a revised, corrected income statement for the year ended December 31, 2020. 2. Prepare a statement of retained earnings for the year ended December 31, 2020

1) Precision Corporation had the following income statement prepared by a new accounting intern for the fiscal year ended December 31, 2020. The management of Precision is concerned that it was not prepared in accordance with generally accepted accounting principles. Precision is a private corporation reporting under ASPE. Precision Corporation Income Statement December 31, 2020 Sales $1,500,000 Interest Revenue 45,000 Issue of Common Shares for Cash 155,000 Total Revenues $1,700,000 Less: Cost of Goods Sold $825,000 Operating Expenses 340,000 Cash Dividends Declared on Common Shares 120,000 Total Expenses 1,285,000 Net Gain $ 415,000 Additional Information: 1. The balance of Retained Earnings was $472,000 on January 1st, 2020. 2. Precision had a profit from discontinued operations of $70,000 and a loss on the disposal of assets of the discontinued operations of $40,000 during 2020. 3. It was discovered that sales had been overstated by $100,000 in 2019. 4. The corporate income tax rate is 50%. Instructions: 1. Prepare a revised, corrected income statement for the year ended December 31, 2020. 2. Prepare a statement of retained earnings for the year ended December 31, 2020

Name: 1) Precision Corporation had the following income statement prepared
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Description: 1) Precision Corporation had the following income statement prepared by a new accounting intern for the fiscal year ended December 31, 2020. Themanagement of Precision is concerned that it was not prepared in accordance with generally accepted accou

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter11: The Corporate Income Tax

Section: Chapter Questions

Problem 5P: Fisafolia Corporation has gross income from operations of $210,000 and operating expenses of...

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Fisafolia Corporation has gross income from operations of $210,000 and operating expenses of $160,000 for 2019. The corporation also has $30,000 in dividends from publicly traded domestic corporations in which the ownership percentage was 45 percent. Calculate the corporation's dividends received deduction for 2019. $_____________ Assume that instead of $210,000, Fisafolia Corporation has gross income from operations of $135,000. Calculate the corporation's dividends received deduction for 2019. $___________ Assume that instead of $210,000, Fisafolia Corporation has gross income from operations of $158,000. Calculate the corporation's dividends received deduction for 2019. $_____________
Situation You are the assistant accountant for Tyler Corporation. It is mid-January 2020 and you are helping to prepare Tylers balance sheet for December 31, 2019. Tyler will publish this balance sheet on March 1, 2020, after the auditors have completed their work. Tyler has a 100,000 note payable that was issued in 2018 and that is due March 6, 2020. On January 5, 2020, Tyler sold 2,000 shares of its 10 par common stock for 80,000. Its intent is to use these proceeds (plus 20,000 cash it already has on hand) to repay the note payable on March 6. The head accountant says Im not sure how to classify the 100,000 note payable on the December 31, 2019, balance sheet. Check this out for me. Directions Research the related generally accepted accounting principles and prepare a short memo to the head accountant that explains how Tyler should report the 100,000 note payable on its December 31, 2019, balance sheet.
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