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cw490410_Scan 5 - .— 1’ new“ 30 Summertime...

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Unformatted text preview: _/ .— 1’], new“ 30) Summertime Corporation's net income before depreciation and taxes is $300,000. Using straight—line W depreciation, the current year's depreciation expense would be $17,000. Using double—declining—balance 6,0 {,2 depreciation, fire current year's depreciation expense would be $26,000. Assuming a tax rate of 40%, what is L" Summertime Corporation's net income if the straight-line d reciation method is used? [L4 3’9? A) $164,400 B) $113,200 $515930} D) $109,600 I ESSAY. Write your answer in the space provided or on a separate sheet of paper. 31) Waterford Place Corporation has issued 75,000 shares of $10 par value common stock. The average issuance price was $23 per share. Waterford Place Corporation recently engaged in the following treasury stock transactions: a. Purchased 15,000 shares of its own stock at $25.00 per share. 1). Sold 2,500 shares of the treasury stock for $25.50 per share. c. Sold the remaining 12,500 shares of treasury stock for $24.00 per share. Prepare journal entries to record the above transactions. 31) a. Treasury Stock 375,000 Cash 375,000 b. Cash 63,750 Treawry Stock 62,500 Paid-in Capital from Treasury Stock Transactions 1,250 c. Cash 300,000 Paid—in Capital from Treasury Stock Transactions 1,250 Retained Earnings 11,250 (12,500 x $25) - $1,250 — (12,500 x $24) Treasury Shock 312,500 (12,500 x $25) ...
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