homework%20solutions%20chapters%205b

homework%20solutions%20chapters%205b - E5-13Results from...

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Unformatted text preview: E5-13Results from discontinued operationsLoss from operations of discontinuedDivision F (net of $90,000 income tax credit)$(210,000)aLoss on write-down of held-for-sale Division F(net of $30,000 income tax credit) (70,000)b$(280,000)a$1,000,000 - $1,300,000 = $(300,000) pretax loss from operations $(300,000) x 0.30 = $90,000 income tax credit $(300,000) - $90,000 = $(210,000) loss from operationsbFair value of Division F$ 250,000 Book value of net assets of Division F:Assets$950,000Less: Liabilities (600,000)Net book value (350,000) Pretax loss$(100,000) Income tax credit [($100,000) x 0.30] 30,000 After tax loss$( 70,000)E5-17TYRONE COMPANYPartial Statement of Cash FlowsFor Year Ended December 31, 2007Net Cash Flow From Operating ActivitiesNet income$22,900Adjustments for differences between income flows and cash flows from operating activities:Add: Depreciation expense 7,800Patent amortization expense 2,700Bond discount amortization 1,000Less:Increase in accounts receivable (3,400)Decrease in accounts payable (2,600)Net cash provided by operating activities$ 28,400E5-19ROCKY COMPANYStatement of Cash FlowsFor Year Ended December 31, 2007Net Cash Flow From Operating ActivitiesNet income$ 41,000Adjustments for differences betweenincome flows and cash flows fromoperating activities:Add: Depreciation expense 11,000Decrease in accounts receivable 2,000Less:Increase in inventories (7,000)Decrease in accounts payable (4,000)Net cash provided by operating activities$ 43,000Cash Flows From Investing ActivitiesPayment for purchase of building$ (40,000)Payment for purchase of equipment...
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homework%20solutions%20chapters%205b - E5-13Results from...

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