Chapter 4 - 4-3 (a) Prepare summary income statements for...

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4-3 (a) Prepare summary income statements for Shikkiah Corp. for its year ended May 31, 2007 and 2008. 2008 2007 Revenue (962-43) 919 888 Expenses (762-41-6+3 loss on land) -718 -704 Profit before tax 201 184 Income tax expense -50.3 -46 Profit from continuing operations 150.7 138 Profit/loss from discontinued operations -3.0 9.7 Net Income 147.7 147.7 (b) Identify how the land that is in process of being expropriated will be measured and reported in the May 31, 2008 financial statements. It appears that the land meets the conditions required to be considered held-for-sale: Highly probable that it will be expropriated by the government – agreement to pay transfer costs and agreement on selling price Not likely that the plans for expropriation will change over the next year Reported on the balance sheet as held-for-sale and measured at the lower of carrying value and fair value less costs to sell ($10). A loss of $13-$10 is reported on the income statement. (c) Identify all the note disclosures that are required as a result of the events described
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This note was uploaded on 12/16/2011 for the course ACCOUNTING 400 taught by Professor Jason during the Spring '10 term at Ranger.

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Chapter 4 - 4-3 (a) Prepare summary income statements for...

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