BUSINESS COLLEGE

Esquire Comic Book Company had income before tax of $1,400,000 in 2021 before considering the following material items: Esquire sold one of its operating divisions, which qualified as a separate component according to generally accepted accounting principles. The before-tax loss on disposal was $380,000. The division generated before-tax income from operations from the beginning of the year through disposal of $580,000. The company incurred restructuring costs of $95,000 during the year. Required: Prepare a 2021 income statement for Esquire beginning with income from continuing operations. Assume an income tax rate of 25%. Ignore EPS disclosures. (Amounts to be deducted should be indicated with a minus sign.)

Answers

Answer 1

Answer:

Answer:

Income statement is prepared below.

Explanation:

Partial income statement

income from continuing operations = 978,750

Discontinued operations:

income from operations of discontinued component = 200,000

income tax expenses 25% of 200,000 = -50000

income from operations of discontinued component =150000

Net income = 1,128,750

Income from continuing operations

income before additional items = 1,400,000

less: restructuring cost -95000

Income before tax = 1305,000

less: tax 25% = -326,250

Income from continuing operations = 978,750

Related Questions

Blitz Industries has a debt-equity ratio of .6. Its WACC is 9.1 percent, and its cost of debt is 6.4 percent. The corporate tax rate is 22 percent. a. What is the company's cost of equity capital? b. What is the company's unlevered cost of equity capital? c-1. What would the cost of equity be if the debt-equity ratio were 2?c-2. What would the cost of equity be if the debt-equity ratio were 1.0?c-3. What would the cost of equity be if the debt-equity ratio were zero?
The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this distinction. Rina spends all of her money on comic books and beignets. In 2011 she earned $14.00 per hour, the price of a comic book was $7.00, and the price of a beignet was $2.00. Which of the following give the nominal value of a variable? Check all that apply. __ Rina's wage is 2 comic books per hour in 2011. __The price of a beignet is $2.00 in 2011. __ Rina's wage is $14.00 per hour in 2011. Which of the following give the real value of a variable? Check all that apply. __Rina's wage is $14.00 per hour in 2011. __The price of a comic book is 3.5 beignets in 2011. __Rina's wage is 7 beignets per hour in 2011. Suppose that the Fed sharply increases the money supply between 2011 and 2016. In 2016, Rina's wage has risen to $28.00 per hour. The price of a comic book is $14.00 and the price of a beignet is $4.00. In 2016, the relative price of a comic book is ( 0.29 beignets, 3.5 beignets, $4.00, $14.00) Between 2011 and 2016, the nominal value of Rina's wage (decreases, increases, remains the same) and the real value of her wage(decreases,increases,remains the same) . Monetary neutrality is the proposition that a change in the money supply (does not affect, affect) nominal variables and ( does not affect, affect) real variables.
Data concerning a recent period’s activity in the Prep Department, the first processing department in a company that uses process costing, appear below: Materials Conversion Equivalent units in ending work in process inventory 2,200 940 Cost per equivalent unit $ 15.26 $ 6.13 A total of 20,200 units were completed and transferred to the next processing department during the period. Required: 1. Compute the cost of ending work in process inventory for materials, conversion, and in total. 2. Compute the cost of the units completed and transferred out for materials, conversion, and in total. (Round your final answers to the nearest whole dollar amount.)
All three of the $5000 billion GDP figures (Production, Income and Spending) are in ____________ dollars.
Suppose that the required reserve ratio is 8%. What is the simple money (deposit) multiplier? Round to two decimal places.Increasing the reserve ratio will _____ the multipliera. increaseb. decrease

It costs $1,200 to produce 50 pounds of a chemical and it costs $2,200 to produce 150 pounds. The chemical sells for $15 per pound x is the amount of chemical; y is in dollars. a. Find the cost function. b. What is the fixed cost? c. How many pounds must be sold to break even? d. Find the cost and revenue at the break-even point.

Answers

Answer:

C(y) = mx + b

y = cost in dollars

x = amount of chemical

m = per unit variable cost

b = fixed cost

Use High low Method to calculate the Variable cost from the total cost given

Variable Cost = ( Highest activity cost - Lowest activity cost ) / ( Highest Number of Units - Lowest Number of Units )

Variable Cost = ( $2,200 - $1,200 ) / ( 150 - 50 )

Variable Cost = $1,000 / 100

Variable Cost = $10 per unit

Fixed Cost = $2,200 - ( 150 x $10 )

Fixed Cost = $2,200 - $1,500

Fixed Cost = $700

Contribution Per Unit = Price - Variable cost

Contribution Per Unit = $15 - $10

Contribution Per Unit = $5

Break-even point = $700 / $5

Break-even point = 140 Pounds

Revenue = 140 x $15 = $2,100

Cost = 140 x 10 = $1,400

You are buying and reselling items found at your local thrift shop. You found an antique pitcher for sale. If you need a 22% markup on cost and know most people will not pay more than $17 for it, what is the most you can pay for the pitcher?

Answers

Answer:

The maximum amount that could be paid for the antique pitcher is $13.93 as shown by the workings in the explanation section below.

Explanation:

Since the maximum price that could be charged for the antique pitcher is $17,the most that could be paid in purchasing it, is given by the below formula:

selling price * 100% / (100% + Markup%)

=$17*100%/(100%+22%)

=$13.93

From the foregoing analysis,the markup in dollar terms is $17-$13.93=$3.07 which represents 22% of the cost price of the antique pitcher.

You need to write a report that shows a company's profits by divisions located in regions around the country. You should organize your report by __________. a. incorporating extensive primary data to assure the reader of your credibility
b. arranging the information chronologically according to the date the profits were generated at each location
c. creating sections of the report that represent each geographic region

Answers

Answer:

c. creating sections of the report that represent each geographic region

Explanation:

In addition to writing the total value of earnings in the report, what will have to be done is to perform a detailed breakdown of the geographical location of the earnings of each place, grouping by geographic location in case you find more than one place in the region. The different divisions must be carried out according to the power that each division represents when selling and not according to city or state.

Big and Tall, CPAs, were auditing Mountain Corporation for the year ended December 31, 2019. On January 15, 2020, a major customer of Mountain Corporation declared bankruptcy as the result of an uninsured loss due to a major fire in their warehouse on January 10, 2020. As a result, a material accounts receivable from the customer was determined to be uncollectible. Big and Tall, CPAs, would expect the client to:________. A. Record the loss on uncollectible accounts as a routine transaction in the year 2020.
B. Treat the loss as a subsequent event and adjust the 2019 financial statements to record the loss on uncollectible accounts.
C. Treat the loss as a subsequent event and provide a footnote about the loss in the 2019 financial statements.
D. File a lawsuit against the customer in hopes of collecting some of the money owed to the client.

Answers

Answer:

The correct answer is Option B.

Explanation:

Based on IAS 10 Events after the Reporting Period, subsequent events can be an adjusting event or non-adjusting event. If it is an adjusting event, it means an event after the reporting date before the audited financial statements are signed that provides further evidence of conditions that existed at the reporting date. However, non-adjusting events are events after the reporting date that are indicative of a condition that arose after the reporting date, this requires disclosure in the financial statements while for adjusting events, the financial statements are adjusted for condition that arose after the reporting date.

The declaration of the customer as bankrupt is an adjusting event since it affects the receivable collection, hence the need to adjust it as uncollectible,

Compute the missing amounts. (Enter the contribution margin ratio to nearest percent, X%.)A B C
Sales price per unit $200 $4,000 $5,220
Variable costs per unit 80 1,000 2,088
Total fixed costs 73,200 660,000 3,758,400
Target profit 266,760 3,000,000 3,132,000
Calculate:
Contribution margin per unit
Contribution margin ratio
Required units to break even
Required sales dollars to break even
Required units to achieve target profit

Answers

Answer:

Contribution margin per unit

A = $120

B = $3,000

C = $3,132

Contribution margin ratio

A = 60%

B = 75%

C = 60%

Units to break even

A = 610 units

B = 220 units

C = 1,200 units

Sales dollars to break even

A = $122,000

B = $880,000

C = $6,264,000

Units to achieve target profit

A = 2,833 units

B = 1220 units

C = 2,200 units

Explanation:

Contribution margin per unit

Contribution margin = Sales - Variable Costs

A B C

Sales price per unit $200 $4,000 $5,220

Variable costs per unit ($80) ($1,000) ($2,088)

Contribution Margin $120 $3,000 $3,132

Contribution margin ratio

Contribution margin ratio = Contribution / Sales × 100

A = $120 / $200 × 100

= 60%

B = $3,000 / $4,000 × 100

= 75%

C = $3,132 / $5,220 × 100

= 60%

Units to break even

Units to break even = Fixed Cost ÷ Contribution margin per unit

A = $73,200 ÷ $120

= 610 units

B = $660,000 ÷ $3,000

= 220 units

C = $3,758,400 ÷ $3,132

= 1,200 units

Sales dollars to break even

Units to break even = Fixed Cost ÷ Contribution margin ratio

A = $73,200 ÷ 60%

= $122,000

B = $660,000 ÷ 75%

= $880,000

C = $3,758,400 ÷ 60%

= $6,264,000

Units to achieve target profit

Units to achieve target profit = Fixed Cost + Target Profit ÷ Contribution margin per unit

A = $73,200 + 266,760 ÷ $120

= 2,833 units

B = $660,000 + 3,000,000 ÷ $3,000

= 1220 units

C = $3,758,400 + 3,132,000 ÷ $3,132

= 2,200 units

Which is a monetary policy that would be useful in stopping deflation?A)
decreasing taxation
B)
increasing the discount rate
C)
increasing government spending
D)
decreasing the reserve requirement

Answers

The correct answer is:

B) increasing the discount rate

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