Write off of inventory due to obsolescence 160000 Income before taxes and

Write off of inventory due to obsolescence 160000

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Write-off of inventory due to obsolescence .................................................................... 160,000 Income before taxes and extraordinary item .................................... 708,000 Income taxes ....................................................................... 240,720 Income before extraordinary item .................................................... 467,280 Extraordinary item Casualty loss .......................................................... 100,000 Less: Applicable tax reduction .............................. 34,000 66,000 Net income $ 401,280 Per share of common stock: Income before extraordinary item ($467,280 ÷ 60,000) ........................................................ $7.79 Extraordinary item (net of tax) ........................................... (1.10 ) Net income ($401,280 ÷ 60,000) ........................................ $6.69 (b) Prepare a separate retained earnings statement for 2014. TRIEU CORP. Retained Earnings Statement For the Year Ended December 31, 2014 Balance, Jan. 1, as reported ..................................................................................................... $1,960,000 Correction for overstatement of net income in prior period (depreciation error) (net of $37,400 tax) ........................................................................ (72,600 ) Balance, Jan. 1, as adjusted ..................................................................................................... 1,887,400 Add: Net income ...................................................................................................................... 401,280 2,288,680 Less: Dividends declared ........................................................................................................ 90,000 Balance, Dec. 31 ......................................................................................................................... $2,198,680 E5-5B (Preparation of a Corrected Balance Sheet) Darling Company has decided to expand its operations. The bookkeeper recently completed the balance sheet in order to obtain additional funds for expansion. DARLING COMPANY
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BALANCE SHEET DECEMBER 31, 2014 Current assets Cash $ 105,000 Accounts receivable (net) 411,000 Inventories at lower of average cost or market 561,000 Available-for-sale securities—at cost (fair value $65,000) 50,000 Property, plant, and equipment Building (net) 1,561,000 Office equipment (net) 125,000 Land held for future use 251,000 Intangible assets Patents 128,000 Cash surrender value of life insurance 26,000 Prepaid expenses 39,000 Current liabilities Accounts payable 367,000 Notes payable (due next month) 75,000 Pension obligation 361,000 Unearned revenue 26,000 Premium on bonds payable 36,000 Long-term liabilities Bonds payable 1,500,000 Stockholders’ equity Common stock, $1.00 par, authorized 1,000,000 shares, issued 610,000 610,000 Additional paid-in capital 200,000 Retained earnings ? Instructions:
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Prepare a revised balance sheet given the available information. Assume that the accumulated depreciation balance for the buildings is $302,000 and for the office equipment, $86,000. The allowance for doubtful accounts has a balance of $37,000. The pension obligation is considered a long-term liability.
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  • Balance Sheet, Revenue, ........., Generally Accepted Accounting Principles

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