# Chapter 8 Homework - ACCT 4455 Chp 8 Chapter 8 HOMEWORK...

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ACCT 4455 Chp 8 MULTIPLE CHOICE 1. d 3,000/.8 – (1,000 + 1,500) = 1,250 2. b 2,100 + 3,500 – (800 – 640) x 6/8 = 5,480 3. a 250 + 300 – (800 – 640) / 8 = 530 4. c 300 + 350 + (800 – 640) / 8 x 40% = 658 5. d [525 + (800 – 640) / 8 x (1 - 40%)] x 20% = 107.4 6. c [1,000 + 2,800 + 525 + 1,250 - (800 – 640) x 6/8 x (1 - 40%)] x 20% = 1,100.6 7. c (800 – 640) x 6/8 x 40% = 48 8. a (800 – 640) x 7/8 x (1 - 40%) = 84 11. c 12. d 13. b [200,000 + 12,000] x 70% = 148,400 14. a 12,000 x 30% x 10% = 360 15. b 2
ACCT 4455 Chp 8 Problem 2 Equipment profit Before Tax 40% tax After tax Year 2 sale – Sally selling 15,000 * Depreciation Years 2 and 3 (3,000 × 2) 6,000 Balance December 31, Year 3 9,000 3,600 5,400 Depreciation Year 4 3,000 1,200 1,800 (a) Balance December 31, Year 4 6,000 2,400 (b) 3,600 * Assuming the sale took place at the beginning of Year 2 (a) Calculation of consolidated net income – Year 4 Income of Peggy 185,000 Income of Sally 53,000 Add: Equipment profit realized (a) 1,800 Adjusted net income 54,800 (c) Peggy's ownership % .75 41,100 Consolidated net income, Year 4 226,100 (b) Peggy Company Consolidated Income Statement For the year ended December 31, Year 4 Gross profit (580,000 + 270,000) \$850,000 Miscellaneous expense (110,000 + 85,000) 195,000 Depreciation expense (162,000 + 97,000 - (a) 3,000) 256,000 Income tax expense (123,000 + 35,000 + (a) 1,200) 159,200 Total expenses 610,200 Net income - consolidated entity 239,800 Noncontrolling interest ((c) 54,800 × 0.25) 13,700

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