The net income for Fallon Company for 2017 was $320,000.During 2017, depreciation on plant assets was $124,000,amortization of patent was $40,000, and the companyincurred a loss on sale of plant assets of $21,000. Computenet cash flow from operating activities.

The net income for Fallon Company for 2017 was $320,000.During 2017, depreciation on plant assets was $124,000,amortization of patent was $40,000, and the companyincurred a loss on sale of plant assets of $21,000. Computenet cash flow from operating activities.

Name: The net income for Fallon Company for 2017 was $320,000.During 2017, d
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Description: The net income for Fallon Company for 2017 was $320,000.During 2017, depreciation on plant assets was $124,000,amortization of patent was $40,000, and the companyincurred a loss on sale of plant assets of $21,000. Computenet cash flow from operating

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 8.5P

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Gray Companys financial statements showed income before income taxes of 4,030,000 for the year ended December 31, 2020, and 3,330,000 for the year ended December 31, 2019. Additional information is as follows: Capital expenditures were 2,800,000 in 2020 and 4,000,000 in 2019. Included in the 2020 capital expenditures is equipment purchased for 1,000,000 on January 1, 2020, with no salvage value. Gray used straight-line depreciation based on a 10-year estimated life in its financial statements. As a result of additional information now available, it is estimated that this equipment should have only an 8-year life. Gray made an error in its financial statements that should be regarded as material. A payment of 180,000 was made in January 2020 and charged to expense in 2020 for insurance premiums applicable to policies commencing and expiring in 2019. No liability had been recorded for this item at December 31, 2019. The allowance for doubtful accounts reflected in Grays financial statements was 7,000 at December 31, 2020, and 97,000 at December 31, 2019. During 2020, 90,000 of uncollectible receivables were written off against the allowance for doubtful accounts. In 2019, the provision for doubtful accounts was based on a percentage of net sales. The 2020 provision has not yet been recorded. Net sales were 58,500,000 for the year ended December 31, 2020, and 49,230,000 for the year ended December 31, 2019. Based on the latest available facts, the 2020 provision for doubtful accounts is estimated to be 0.2% of net sales. A review of the estimated warranty liability at December 31, 2020, which is included in other liabilities in Grays financial statements, has disclosed that this estimated liability should be increased 170,000. Gray has two large blast furnaces that it uses in its manufacturing process. These furnaces must be periodically relined. Furnace A was relined in January 2014 at a cost of 230,000 and in January 2019 at a cost of 280,000. Furnace B was relined for the first time in January 2020 at a cost of 300,000. In Grays financial statements, these costs were expensed as incurred. Since a relining will last for 5 years, Grays management feels it would be preferable to capitalize and depreciate the cost of the relining over the productive life of the relining. Gray has decided to nuke a change in accounting principle from expensing relining costs as incurred to capitalizing them and depreciating them over their productive life on a straight-line basis with a full years depreciation in the year of relining. This change meets the requirements for a change in accounting principle under GAAP. Required: 1. For the years ended December 31, 2020 and 2019, prepare a worksheet reconciling income before income taxes as given previously with income before income taxes as adjusted for the preceding additional information. Show supporting computations in good form. Ignore income taxes and deferred tax considerations in your answer. The worksheet should have the following format: 2. As of January 1, 2020, compute the retrospective adjustment of retained earnings for the change in accounting principle from expensing to capitalizing relining costs. Ignore income taxes and deferred tax considerations in your answer.
The net income for Fallon Company for 2020 was $320,000. During 2020, depreciation on plant assets was $124,000, amortization of patent was $40,000, and the company incurred a loss on sale of plant assets of $21,000. Compute net cash flow from operating activities.
The net income for Adcock Co. for 2011 was $280000. For 2011, depreciation on plant asset was $70000, and the company incurred a loss on sale of plant asset of $12000. Compute net cash provided by operating activities under the indirect method?
The following data has been taken from the Shine Machinery Inc., income statement and balance sheet: Dec. 31, Jan. 2012 Jan. 1, 2013 Income statement: Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . .$375,000 Depreciation Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 115,000 Amortization of Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,000 Gain on Sale of Plant Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ….. 91,000 Loss on Sale of Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . …. . 34,000 Balance sheet: Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...$345,000…
The net income for Sunland Co. for 2022 was $282,900. For 2022, depreciation on plant assets was $68,300, and the company incurred a loss on disposal of plant assets of $27,600.Compute net cash provided by operating activities under the indirect method, assuming there were no other changes in the company’s accounts.
Wyhowski Inc. reported income from operations, before taxes, for 2015-2017 as follows: 2015 $425,000 2016 486,000 2017 570,000 When calculating income, Wyhowski deducted depreciation on plant equipment. The equipment was purchased on January 1, 2015, at a cost of $177,000. The equipment is expected to last three years and has a(n) $15,000 salvage value. Wyhowski uses straight-line depreciation for book purposes. For tax purposes, depreciation on the equipment is $101,000 in 2015, $41,000 in 2016, and $20,000 in 2017. Wyhowski's tax rate is 35%. Required: Enter all amounts as positive numbers. 1. How much did Wyhowski pay in income tax each year? If required, round all calculations to the nearest dollar. Year Taxes Paid 2015 $ 2016 $ 2017 $ 2. How much income tax expense did Wyhowski record each year? Year Income Tax Expense 2015 $ 2016 $ 2017 $ 3. What is the balance in the Deferred Income Tax account at the end of 2015, 2016, and 2017? If your…
Burg Company’s beginning balance in its Property, Plant, and Equipment (PP&E) account was $700,000 on January 1, 2017. The PP&E account had an ending balance of $1,000,000 on December 31, 2017. Accumulated Depreciation on the equipment had a beginning balance of $300,000 and an ending balance of $420,000. Depreciation expense during 2017 was $200,000. Strasburg sold PP&E with a net value of $50,000 during 2017, and reported a gain on the sale of $14,000. How much cash did Strasburg receive from the sale of PP&E? How much cash did Strasburg pay to purchase new PP&E?
The plant assets section of the comparative balance sheets of Anders Company is reported below. ANDERS COMPANY Comparative Balance Sheets 2017 2016 Plant assets Equipment $ 180,000 $ 270,000 Accum. Depr.—Equipment (100,000 ) (210,000 ) Equipment, net $ 80,000 $ 60,000 Buildings $ 380,000 $ 400,000 Accum. Depr.—Buildings (100,000 ) (285,000 ) Buildings, net $ 280,000 $ 115,000 During 2017, a building with a book value of $70,000 and an original cost of $300,000 was sold at a gain of $60,000. 1. How much cash did Anders receive from the sale of the building?2. How much depreciation expense was recorded on buildings during 2017?3. What was the cost of buildings purchased by Anders during 2017?
Presented below are 11 income statement items from Braun Company for the year ended December 31, 2020. Sales revenue $2,700,000 Cost of goods sold 1,150,000 Interest revenue 15,000 Loss from abandonment of plant assets 45,000 Gain from extinguishment of debt 28,000 Selling expenses 290,000 Administrative expenses 190,000 Effect of change in estimated useful lives of fixed assets (included in administrative expenses) 35,000 Loss from earthquake 30,000 Gain on disposal of discontinued operation 50,000 Instructions a. Using the information above, prepare a condensed multiple-step income statement. Assume a tax rate of 30% and 100,000 shares of common stock outstanding during 2020. b. Compute comprehensive income for Braun in 2020, assuming Braun had an unrealized holding loss on an available-for-sale debt investment, net of tax, $12,000.
The following data has been taken from the Shine Machinery Inc., income statement and balance sheet: Dec. 31, Jan. Jan. 1,2013 “Income statement: Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . .$375,000 Depreciation Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 115,000 Amortization of Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,000 Gain on Sale of Plant Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ….. 91,000 Loss on Sale of Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . …. . 34,000 Balance sheet: Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...$345,000…
Please answer all the parts of the below question: At December 31, 2017, Sheffield Corporation reported the following plant assets. Land $ 3,798,000 Buildings $26,660,000 Less: Accumulated depreciation—buildings 15,097,050 11,562,950 Equipment 50,640,000 Less: Accumulated depreciation—equipment 6,330,000 44,310,000 Total plant assets $59,670,950 During 2018, the following selected cash transactions occurred. Apr. 1 Purchased land for $2,785,200. May 1 Sold equipment that cost $759,600 when purchased on January 1, 2011. The equipment was sold for $215,220. June 1 Sold land for $2,025,600. The land cost $1,266,000. July 1 Purchased equipment for $1,392,600. Dec. 31 Retired equipment that cost $886,200 when purchased on December 31, 2008. No salvage value was received. Prepare a tabular summary that includes the plant asset accounts and…
The information that follows relates to equipment owned by Pearl Limited at December 31, 2017: Cost $7,560,000 Accumulated depreciation to date 840,000 Expected future net cash flows (undiscounted) 5,880,000 Expected future net cash flows (discounted, value in use) 5,334,000 Fair value 5,208,000 Costs to sell (costs of disposal) 42,000 Assume that Pearl will continue to use this asset in the future. As at December 31, 2017, the equipment has a remaining useful life of four years. Pearl uses the straight-line method of depreciation. Assume that Pearl is a private company that follows ASPE. 1. Prepare the journal entry at December 31, 2017, to record asset impairment, if any. 2. Prepare the journal entry to record depreciation expense for 2018. 3. The equipment’s fair value at December 31, 2018, is $5.46 million. Prepare the journal entry, if any, to record the increase in fair value. Repeat the requirements in (a) above assuming that Pearl…