Net income for the year 2019 was $15,000. Accounts receivable increased $12,000, inventories decreased $4,000, and accounts payable decreased $5,000. Depreciation expense included in net income was $6,000. During the year, a piece of land was purchased for $7,000 and a truck was sold for $4,000 when its book value was $5,500. The company borrowed $28,000 on a two-year note from the bank and repaid $15,400 on a short-term note. Dividends of $16,000 were declared during 2019. The balance in Dividends Payable increased by $10,000 for the year. What was net cash flow from operating activities (if a decrease, place your result in parentheses)? Correct Answer: $
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- During 2021, New Era Inc. constructed assets costing $1,000,000. The weighted-average accumulated expenditures on these assets during 2021 was $600,000. To help pay for construction, $440,000 was borrowed at 10% on January 1, 2021 , and funds not needed for construction were temporarily invested in short-term securities, yielding $9,000 in interest revenue. Other than the construction funds borrowed, the only other debt outstanding during the year was a $500,000, 10-year, 9% note payable dated January 1, 2015. What is the amount of interest that should be capitalized by New Era Inc. during 2021? $See the explanation below to work the problem. XYZ Company, a 'for-profit' business, had revenues of $12 million in 2022. Expenses other than depreciation totaled 75 percent of revenues. XYZ Company, must pay taxes at a rate of 40 percent of pretax (operating) income. All revenues were collected in cash during the year, and all expenses other than depreciation were paid in cash. Depreciation originally was $1.5 million; however, a change in the depreciation schedule (still within GAAP) has now made the depreciation expense DOUBLE. Based on this change in depreciation expense, what would XYZ's net income now be? Select one or more: a. so b. $3,000,000 c. $1,500,000 Od. Not enough information to tellThe records for Ivanhoe Co. show this data for 2021: ● Gross profit on installment sales recorded on the books was $460,000. Gross profit from collections of installment receivables was $320,000. ● Life insurance on officers was $4,200. ● Machinery was acquired in January for $340,000. Straight-line depreciation over a ten-year life (no salvage value) is used. For tax purposes, MACRS depreciation is used and Ivanhoe may deduct 14% for 2021. ● Interest received on tax exempt Iowa State bonds was $9,400. ● The estimated warranty liability related to 2021 sales was $22,000. Repair costs under warranties during 2021 were $14,000. The remainder will be incurred in 2022. ● Pretax financial income is $640,000. The tax rate is 20%. Prepare a schedule starting with pretax financial income and compute taxable income. Schedule of Pretax Financial Incomeand Taxable Income for 2021 $…
- The records for Pharoah Co. show this data for 2021: ● Gross profit on installment sales recorded on the books was $480,000. Gross profit from collections of installment receivables was $340,000. ● Life insurance on officers was $4,400. ● Machinery was acquired in January for $360,000. Straight-line depreciation over a ten-year life (no salvage value) is used. For tax purposes, MACRS depreciation is used and Pharoah may deduct 14% for 2021. ● Interest received on tax exempt Iowa State bonds was $9,600. ● The estimated warranty liability related to 2021 sales was $22,200. Repair costs under warranties during 2021 were $14,200. The remainder will be incurred in 2022. ● Pretax financial income is $660,000. The tax rate is 20%. (a) Prepare a schedule starting with pretax financial income and compute taxable income. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Schedule of…The records for Ivanhoe Co. show this data for 2021: ● Gross profit on installment sales recorded on the books was $350,000. Gross profit from collections of installment receivables was $210,000. ● Life insurance on officers was $3,100. ● Machinery was acquired in January for $230,000. Straight-line depreciation over a ten-year life (no salvage value) is used. For tax purposes, MACRS depreciation is used and Ivanhoe may deduct 14% for 2021. ● Interest received on tax exempt Iowa State bonds was $8,300. ● The estimated warranty liability related to 2021 sales was $20,900. Repair costs under warranties during 2021 were $12,900. The remainder will be incurred in 2022. ● Pretax financial income is $530,000. The tax rate is 20%. (a) Prepare a schedule starting with pretax financial income and compute taxable income. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Schedule of…During 2025, Crane Company constructed assets costing $4070000. The weighted-average accumulated expenditures on these assets during 2025 was $2410000. To help pay for construction, $1720000 was borrowed at 10% on January 1, 2025, and funds not needed for construction were temporarily invested in short-term securities, yielding $35000 in interest revenue. Other than the construction funds borrowed, the only other debt outstanding during the year was a $1970000, 10-year, 9% note payable dated January 1, 2019. Interest is payable on both notes at December 31, 2025. What is the amount of interest that should be capitalized by Crane during 2025? O $234100. O $241000. O $366300. O $120500.
- Henrietta Leavitt Health Clinic, a for-profit business, had revenues of $10 million in 2019. Expenses other than depreciation totaled 70% of revenues, and depreciation expense was $1.3 million. They also must pay taxes at a rate of 40 % of pretax income. All revenues were collected in cash during the year, and all expenses, other than depreciation were paid in cash. 1. Construct Henrietta Leavitt Health Clinic’s 2019 income statement. 2. What were Henrietta Leavitt Health Clinic’s net income, total profit margin, and cash flow? 3. Now, suppose the company changed its depreciation calculation procedures (still within GAAP) such that its depreciation expense doubled. How would this change affect Henrietta Leavitt Health Clinic’s net income, total profit marge, and cash flow? show all of your workSheffield Corp. is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $6470000 on March 1, $5340000 on June 1, and $7950000 on December 31. Sheffield Corp. borrowed $3250000 on January 1 on a 5-year, 10% note to help finance construction of the building. In addition, the company had outstanding all year a 8%, 3-year, $6450000 note payable and an 9%, 4-year, $12350000 note payable. What is the weighted-average interest rate used for interest capitalization purposesDuring 2021, Colorado Company constructed a 3-storey building. The weighted average expenditures for capitalization of interest during 2021 amounted to P 23,600,000. The existing debt of Colorado are the following: From Union Bank (specific borrowing), P 3,600,000, 10% From Land Bank (general borrowing), P 6,000,000, 20% From Security Bank (general borrowing), P 10,000,000, 18% What is the capitalized borrowing costs for the year ended December 31, 2021? A. 4,110,000 B. 3,750,000 C. 3,788,000 D. 3,360,000 What is the interest expense for the year ended December 31, 2021? A. 322,000 B. 390,000 C. 750,000 D. 0
- On December 31, 2019, Pronghorn Inc. borrowed $4,140,000 at 13% payable annually to finance the construction of a new building. In 2020, the company made the following expenditures related to this building: March 1, $496,800; June 1, $828,000; July 1, $2,070,000; December 1, $2,070,000. The building was completed in February 2021. Additional information is provided as follows. 1. Other debt outstanding 10-year, 14% bond, December 31, 2013, interest payable annually $5,520,000 6-year, 11% note, dated December 31, 2017, interest payable annually $2,208,000 2. March 1, 2020, expenditure included land costs of $207,000 3. Interest revenue earned in 2020 $67,620 (a) Determine the amount of interest to be capitalized in 2020 in relation to the construction of the building. The amount of interest %24On December 31, 2019, Pronghorn Inc. borrowed $4,140,000 at 13% payable annually to finance the construction of a new building. In 2020, the company made the following expenditures related to this building: March 1, $496,800; June 1, $828,000; July 1, $2,070,000; December 1, $2,070,000. The building was completed in February 2021. Additional information is provided as follows. 1. Other debt outstanding 10-year, 14% bond, December 31, 2013, interest payable annually $5,520,000 6-year, 11% note, dated December 31, 2017, interest payable annually $2,208,000 2. March 1, 2020, expenditure included land costs of $207,000 Interest revenue earned in 2020 $67,620 3.On December 31, 2024, Crane Inc. borrowed $3,060,000 at 13% payable annually to finance the construction of a new building. In 2025, the company made the following expenditures related to this building: March 1, $367,200; June 1, $612,000; July 1, $1,530,000; December 1, $1,530,000. The building was completed in February 2026. Additional information is provided as follows. 1. 2. 3. (a) Other debt outstanding: 10-year, 14% bond, December 31, 2018, interest payable annually 6-year, 11% note, dated December 31, 2022, interest payable annually March 1, 2025, expenditure included land costs of $153,000. Interest revenue of $49,980 earned in 2025. Determine the amount of interest to be capitalized in 2025 in relation to the construction of the building. The amount of interest $ $4,080,000 1,632,000 ta