Chapter 3 Assignment Solutions 2017.docx

Chapter 3 Assignment Solutions 2017.docx - Chapter 3...

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Chapter 3 Assignment Solutions Question 1. Haliteck Corporation is based in Halifax. At the end of 20X4, the company’s accounting records show the following items: a) $106,000 loss from hurricane damage. b) Total sales revenue of $2,750,000, including $415,000 in the Decolite division, for which the company has a formal plan of sale. c) Interest expense on long-term debt of $68,000. d) Increase in fair value of marketable securities of $58,000. e) Operating expenses of $2,130,000, including depreciation and amortization of $515,000. Of the total expenses, $412,000 (including $78,000 in depreciation and amortization) was incurred in the Decolite division. f) Haliteck Corporation wrote down tangible capital assets by $32,000 during the year in order to reduce the Decolite division’s assets to their estimated recoverable amount. g) Haliteck has long-term debt denominated in U.S. dollars. Due to the weakening of the U.S. dollar during 20X4, the company has an unrealized gain of $20,000. h) Haliteck has a subsidiary in France. The euro strengthened during the year, with the result that Norse had an unrealized gain of $14,000 on its net investment in the subsidiary i) Haliteck’s income tax expense for 20X4 is $74,000. This amount is net of a tax recovery of $23,000 on the Decolite division and a $28,000 tax benefit from hurricane damage. j) The company had 37,000 common shares outstanding at the beginning of the year; an additional 8,000 were issued on March 31. Required: Prepare a continuous SCI.
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