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Chapter 3-4 Lab Problems 9.14.2021

1. The amount that should be included in current liabilities on the classified balance sheet is $90,000. This includes $50,000 in accounts payable, $30,000 in salaries payable, and $20,000 for the current year principal payment on the note payable due in 2025. 2. The amount that should be reported as discontinued operations in 2020 is $37,500. This is calculated as the operating loss of $50,000 plus the difference between the carrying value ($700,000) and expected sales price ($500,000), which is $200,000, multiplied by the tax rate of 25%. 3. The multi-step income statement should separate the

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54 views

Chapter 3-4 Lab Problems 9.14.2021

1. The amount that should be included in current liabilities on the classified balance sheet is $90,000. This includes $50,000 in accounts payable, $30,000 in salaries payable, and $20,000 for the current year principal payment on the note payable due in 2025. 2. The amount that should be reported as discontinued operations in 2020 is $37,500. This is calculated as the operating loss of $50,000 plus the difference between the carrying value ($700,000) and expected sales price ($500,000), which is $200,000, multiplied by the tax rate of 25%. 3. The multi-step income statement should separate the

Uploaded by

Abdullah alhamaad
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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AC 310 Chapter 3 Lab Problems 9.14.

2021

1. Todd’s Car Company’s trial balance included the following account balances at December 31,
2019:

Accounts payable $ 50,000  


Bond payable, due 2027   800,000  
Salaries payable   30,000  
Note payable, due 2020   10,000  
Note payable, due 2025*   100,000  
*The note matures in 2025, but annual principal
payments of $20,000 are due on December 31 of each
year starting in 2020.

What amount should be included in current liabilities on the classified balance sheet?

2. On May 15, 2020, Moran Inc. approved a plan to dispose of a component of its business. At the
end of the year, the component has a carrying value of $700,000. It is expected that the sale will
close on February 1, 2021. The expected sales price is $500,000. As of December 31, 2020, the
component had an operating loss of $50,000. If the company has a 25% tax rate, what amount
should be reported as discontinued operations in 2020?

3. The following income statement for Axel Corporation was prepared by the accountant. You have
been asked to review it and prepare a corrected multi-step income statement.
Axel Corporation
Income Statement
For the Year Ended December 31, 2021
Revenues and Gains
Sales Revenue $592,000
Interest Revenue 32,000
Gain on Sale of Investments 86,000
Total Revenues and Gains 710,000

Expenses and Losses


Cost of Goods Sold $325,000
Selling Expenses 67,000
Administrative Expenses 87,000
Interest Expense 16,000
Restructuring Costs 55,000
Income Tax Expense 40,000
Total Expenses and Losses 590,000

Net Income 120,000

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