ACC211 Chapter 4
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Brief Exercise 4-5
Your answer is correct.
Stacy Corporation had income before income taxes for 2014 of $6,325,000. In addition, it suffered an unusual and infrequent pretax loss of $787,700 from a volcano eruption. The corporation’s tax rate is 30%. Prepare a partial income statement for Stacy beginning with income before income taxes. The corporation had 4,954,000 shares of common stock outstanding during 2014.
Brief Exercise 4-7
Your answer is correct.
Vandross Company has recorded bad debt expense in the past at a rate of 1.5% of net sales. In 2014, Vandross decides to increase its estimate to 2%. If the new rate had been used in prior years, cumulative bad debt expense would have been $385,820 instead of $302,620. In 2014, bad debt expense will be $130,260 instead of $92,200. If Vandross’s tax rate is 27%, what amount should it report as the cumulative effect of changing the estimated bad debt rate?
Brief Exercise 4-8
Your answer is correct.
In 2014, Hollis Corporation reported net income of $1,077,000. It declared and paid preferred stock dividends of $269,000. During 2014, Hollis had a weighted average of 199,100 common shares outstanding. Compute Hollis’s 2014 earnings per share.
Brief Exercise 4-10
Your answer is correct.
Portman Corporation has retained earnings of $720,100 at January 1, 2014. Net income during 2014 was $1,651,000, and cash dividends declared and paid during 2014 totaled $82,800. Prepare a retained earnings statement for the year ended December 31, 2014. Assume an error was discovered: land costing $87,010 (net of tax) was charged to maintenance and repairs expense in 2011.
Exercise 4-3
Your answer is correct.
Presented below are certain account balances of Paczki Products Co.
Rent revenue $7,030 Sales discounts $8,130
Interest expense 12,960 Selling expenses 99,480
Beginning...