Richmond Inc. reported income from operations during 2019 of $750,000. Additional transactions occurring in 2019 but...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Richmond Inc. reported income from operations during 2019 of $750,000. Additional transactions occurring in 2019 but not considered in the $750,000 are as follows: 1. The corporation experiences an uninsured loss due to government determination of possible contamination in the amount of $55,000 before taxes during the year. The company had never experienced a similar situation in its history. 2. The corporation decided to change from the weighted average method of inventory to the First-In First-Out method. The effect of this change on prior years is an increase in income before taxes of $35,000. The First-in First-out method has been used for 2019. 3. Investments sold resulted in a loss of $92,800 before taxes. 4. Available-for-Sale Debt Securities experienced an unrealized holding gain of $32,000 before taxes during 2019. 5. The board of directors voted on January 1, 2019, to dispose of a segment of its business. On that date the book value of the segment was $1,400,000. The corporation was committed to the plan to sell and was actively looking for a buyer. The segment was sold on November 30, 2019 for $1,180,000. The segment generated an income of $375,000 from operations from January 1, 2019 to the disposal date. The disposal of the segment is viewed as a strategic shift that will have a major effect on the operations and the financial results of the corporation. 6. Retained Earnings had a balance of $80,000 at January 1, 2019. 7. The income tax rate for 2019 is 30%. Calculate the income from continuing operations that should be reported in the income statement for the year ended December 31, 2019. Please use the following format for your answer $XXX,XXX.XX Richmond Inc. reported income from operations during 2019 of $750,000. Additional transactions occurring in 2019 but not considered in the $750,000 are as follows: 1. The corporation experiences an uninsured loss due to government determination of possible contamination in the amount of $55,000 before taxes during the year. The company had never experienced a similar situation in its history. 2. The corporation decided to change from the weighted average method of inventory to the First-In First-Out method. The effect of this change on prior years is an increase in income before taxes of $35,000. The First-in First-out method has been used for 2019. 3. Investments sold resulted in a loss of $92,800 before taxes. 4. Available-for-Sale Debt Securities experienced an unrealized holding gain of $32,000 before taxes during 2019. 5. The board of directors voted on January 1, 2019, to dispose of a segment of its business. On that date the book value of the segment was $1,400,000. The corporation was committed to the plan to sell and was actively looking for a buyer. The segment was sold on November 30, 2019 for $1,180,000. The segment generated an income of $375,000 from operations from January 1, 2019 to the disposal date. The disposal of the segment is viewed as a strategic shift that will have a major effect on the operations and the financial results of the corporation. 6. Retained Earnings had a balance of $80,000 at January 1, 2019. 7. The income tax rate for 2019 is 30%. Calculate the income from continuing operations that should be reported in the income statement for the year ended December 31, 2019. Please use the following format for your answer $XXX,XXX.XX
Expert Answer:
Answer rating: 100% (QA)
Refer the solution in the image and understand what are discontinued operations and extraordinary items as written below A discontinued operation occurs when a business sells a segment usually an unpr... View the full answer
Related Book For
Cornerstones of Financial and Managerial Accounting
ISBN: 978-1111879044
2nd edition
Authors: Rich, Jeff Jones, Dan Heitger, Maryanne Mowen, Don Hansen
Posted Date:
Students also viewed these accounting questions
-
The W27 x 94 beam shown below is laterally supported shown (points A, B, C, and D). The concentrated load is a service live load. Use Fy= 345 MPa and determine the following: a. Lp (2 points) b. Lr...
-
A Co. has annual fixed Costs Of % 1,40,000. In 2012 sales amounted to 6,00,000, as Compared with 2% 4,950,000 in 2011, and profit in 2012 was 2 42,000 higher than that in 2011. i) At what level of...
-
Solar drying has been used for centuries to dry and, thus, preserve fish, fruit, meat, plants, seeds, and wood. What are the advantages and disadvantages of this type of drying? What other types of...
-
Katz Hat Shop received a shipment of hats for which it paid the wholesaler $2,970. The price of the hats was $3,000, but Katz was given a $30 cash discount and required to pay freight charges of $50....
-
Comparative balance sheets as at 31 December 2011 and 2012 for Chartowers Ltd are shown below. Sales for 2012 were $180 000, and net income after tax was $16 350. Cost of sales was $136 456....
-
Fill in the right-hand column of the following table to describe the processing of the call instruction on line 9 of the object code in Figure 4.17: Figure 4.17 Stage Fetch Stage Decode Execute...
-
The flowrate in a water channel is sometimes determined by use of a device called a Venturi flume. As shown in Fig. P3.131, this device consists simply of a bump on the bottom of the channel. If the...
-
What were the threats for the InfoSys before they entered the "Building Tomorrow's Enterprise" phase? List opportunities that existed on a market for the InfoSys back then? Was the industry...
-
Consider a semiannual 3.5% coupon bond with a $1,000 face value that has 4 years to maturity. (a) Calculate the market price of this bond using a yield to maturity (YTM) of 3.6%. Is this bond a...
-
1) Use the base case assumptions as well as the information presented in the case to build a four-year discounted cash flow model for Advanced Seal given a 50% cannibalization rate for the Premium...
-
Discussion Topic Please read the following article and website on image maps: So, You Want An Image Map, Huh?https://www.htmlgoodies.com/css/how-to-create-image-maps-with-html-and-css/ Learn to Code:...
-
Using your knowledge of the ATP synthase molecular machine calculate the efficiency with which it couples/converts the stored chemical potential energy of the proton motive force into the synthesis...
-
Givetworeasons why you might prefer a 30-year fixed-rate mortgage (FRM) over a 5/1 ARM.
-
(a) Draw and parametrize the circle of radius two centered at (1,-1,1) and lying on the plane z+y+z=1. Hint: find two orthogonal unit vectors which are parallel to the plane. (b) Find parametric...
-
Read the article - "BUDGETING LEVERS, STRATEGIC AGILITY AND THE USE OF PERFORMANCE BUDGETING" OECD Conference 20-12. Briefly explain the meaning of budget agility? How would you classify the...
-
The two employees had an altercation on the job site, one used a blunt instrument to inflict a wound on the other employee. the company terminated one employee and suspended the other. The Union...
-
The experimental magnetic moments of following Ni(II) complex at room temperature was found to be in the range 0.12 BM. (i) based on this observation, specify whether the geometry of the metal...
-
Digital Fruit is financed solely by common stock and has outstanding 25 million shares with a market price of $10 a share. It now announces that it intends to issue $160 million of debt and to use...
-
From time to time, business news will report that the management of a company has misstated its profits by knowingly establishing an incorrect amount for its ending inventory . Required: 1. Explain...
-
Refer to the information in Cornerstone Exercise 16-24 for data. Now, assume that Hallett has decided to use a plantwide overhead rate based on direct labor hours. At the beginning of the year,...
-
Refer to the information for Filimonov Inc. and assume that the company uses a perpetual inventory system. Required: Calculate the cost of goods sold and the cost of ending inventory using the...
-
Explain any four types of statistical analysis and their underlying statistical concepts. Describe how each of them has a unique role in the data analysis process.
-
Located in Tokyo, Japan, Sony Mobile Communications is a prominent competitor in the worldwide electronics equipment market. Because of stagnant sales in its ultra HD TVs, that division has decided...
-
Cory Rogers of CMG Research was happy to call Nick Thomas to inform him that Auto Concepts survey data were collected and ready for analysis. Of course, Cory had other marketing research projects and...
Study smarter with the SolutionInn App