Question: Matador Company is preparing its 2 0 2 2 financial statements. Matadors bookkeeper has determined Income from Continuing Operations ( ICO ) but is not

Matador Company is preparing its 2022 financial statements. Matadors bookkeeper has determined Income from Continuing Operations (ICO) but is not certain this number is accurate. Matador has a corporate tax rate of 30%. Use the following information to determine the adjustments, if any, to ICO. (Hint: if you are adjusting ICO, should the adjustments be pre-tax or net of tax?) If you need to increase ICO, enter your answer as a positive number; for instance: 3000 If you need to decrease ICO, enter your answer as a negative number; for instance: -3000 If you determine no change is needed to ICO; enter 0.1. Over the past 4 years, Matador has estimated warranty expense based on 3.5% of sales. On May 1,2022, after reviewing its most recent year end number for actual warranties paid, it decided to change this estimate to 4.75%. If Matador had used the 4.75% in the past, warranty expenses would be $150,000 higher in prior years. During fiscal 2022, Matador had earned sales revenues of $2,750,000 of which 20% were cash sales and 80% were credit sales. The bookkeeper calculated warranty expenses for 2022 using the 3.5%. Round answer to nearest whole dollar. Determine the adjustment to ICO. Matador has a corporate tax rate of 30%.

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