Reformulating Balance Sheet and Income Statement for an Asset Disposal In 2015, Winnebago Industries recorded an impairment loss of $315,000 on its corporate plane. We wish to reformulate the company’s income statement and balance sheet under the assumption that the plane had been used for the prior five years—see Analyst Adjustments 6.2 for guidance. The company’s tax rate is 30%. a. For the income statement, identify with numbers the adjustments for each of the five years 2011-2015 for: Loss on disposal Depreciation Tax expense Net income Use a negative sign with your answer to indicate an adjustment decreases the account. Income Statement Adjustments 2011 2012 2013 2014 2015 Loss on disposal (reversal) Answer Tax Expense (reversal) Answer Net Income (reversal) Answer Depreciation Answer Answer Answer Answer Answer Tax Expense Answer Answer Answer Answer Answer Net income (adjustment) Answer Answer Answer Answer Answer Total net income (reversal + adjustment) Answer Answer Answer Answer Answer b. For the balance sheet, identify with numbers the adjustments for each of the five years 2011-2015 for: Accumulated depreciation Deferred tax Retained earnings Use a negative sign with your answer to indicate an adjustment decreases the account. Balance Sheet Adjustments 2011 2012 2013 2014 2015 Accumulated depreciation Answer Answer Answer Answer Answer Deferred tax liability Answer Answer Answer Answer Answer Retained Earnings Answer Answer Answer Answer Answer

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles

Section: Chapter Questions

Problem 8.2P

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Reformulating Balance Sheet and Income Statement for an Asset Disposal

In 2015, Winnebago Industries recorded an impairment loss of $315,000 on its corporate plane. We wish to reformulate the company’s income statement and balance sheet under the assumption that the plane had been used for the prior five years—see Analyst Adjustments 6.2 for guidance. The company’s tax rate is 30%.

a. For the income statement, identify with numbers the adjustments for each of the five years 2011-2015 for:

Loss on disposal
Depreciation
Tax expense
Net income

Use a negative sign with your answer to indicate an adjustment decreases the account.

Income Statement Adjustments	2011	2012	2013	2014	2015
Loss on disposal (reversal)					Answer
Tax Expense (reversal)					Answer
Net Income (reversal)					Answer
Depreciation	Answer	Answer	Answer	Answer	Answer
Tax Expense	Answer	Answer	Answer	Answer	Answer
Net income (adjustment)	Answer	Answer	Answer	Answer	Answer
Total net income (reversal + adjustment)	Answer	Answer	Answer	Answer	Answer

b. For the balance sheet, identify with numbers the adjustments for each of the five years 2011-2015 for:

Accumulated depreciation
Deferred tax
Retained earnings

Use a negative sign with your answer to indicate an adjustment decreases the account.

Balance Sheet Adjustments	2011	2012	2013	2014	2015
Accumulated depreciation	Answer	Answer	Answer	Answer	Answer
Deferred tax liability	Answer	Answer	Answer	Answer	Answer
Retained Earnings	Answer	Answer	Answer	Answer	Answer

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