oday I advised the president of Crane Corporation regarding his November 25 letter. Crane Corporation had 2,000 shares of stock outstanding. It redeemed 500 shares for $370,000, when it had paid-in capital of $300,000 and E & P of $1,200,000. The edemption qualifies for sale or exchange treatment for the shareholder. Crane incurred $13,000 of accounting and legal fees with respect to the redemption
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- On January 3, 2021 A Company purchases a 15 percent interest in B Corporation's common stock for P50,000 cash. A company accounts for the investment using the cost method. B's net income for 2021 is P20,000, but it declares no dividends. In 2022 B's net income is P80,000, and it declares dividends of P120,000. What is the correct balance of A's investment in B account at December 31, 2022?Can you please help me find what amount should be reported as income before tax in the financial statements? 1. The financial statements of Kare-Kare Company for the calendar year ending December 31, 2021 are authorized for issue on March 30, 2022. Income before tax was computed at P50,000,000 before the following events occurred in the company: a. The company had investments in shares held for trading which were recorded at the fair value of P600,000 on December 31, 2021. During the period up to March 1, 2022, there was a steady decline in the fair value of all the shares in the portfolio, and on March 1, 2022, the fair value had fallen to P500,000. b. A customer owing the company P300,000 filed for bankruptcy on February 2, 2022. The company included in its financial statements an allowance for doubtful accountsp ertaining to this customer of P100,000. c. A shipping vessel of the company with a carrying amount of P10,000,000 was destroyed at sea because of the missile fired by the…1. What amount should be reported as income before tax in the financial statements? * 1. The financial statements of Kare-Kare Company for the calendar year ending December 31, 2021 are authorized for issue on March 30, 2022. Income before tax was computed at P50,000,000 before the following events occurred in the company: a. The company had investments in shares held for trading which were recorded at the fair value of P600,000 on December 31, 2021. During the period up to March 1, 2022, there was a steady decline in the fair value of all the shares in the portfolio, and on March 1, 2022, the fair value had fallen to P500,000. b. A customer owing the company P300,000 filed for bankruptcy on February 2, 2022. The company included in its financial statements an allowance for doubtful accounts pertaining to this customer of P100,000. c. A shipping vessel of the company with a carrying amount of P10,000,000 was destroyed at sea because of the missile fired by the Russian army which…
- The Nelsons had the following activity in their brokerage account during the year (all transactions were reported on Form 1099-B. Basis information on each stock sale was reported to the IRS): Sold 100 shares of Disney, Inc. 10/9/20 $3,710 Sold 5 shares of Target, Inc. 5/15/20 $2,415 Relevant tax basis/holding period information related to sales of securities in the current year: Purchased 100 shares of Disney Inc. 8/3/18 $8,134 Purchased 10 shares of Target, Inc. 10/4/19 $2,728 The Nelsons have a $3,500 long-term capital loss carryover from the prior tax year. Use Form 8949 and page 1 of Schedule D to compute net long-term and short-term capital gainsDabin Company purchased a P1,000,000 ordinary life insurance policy for its president. The beneficiary of the life insurance policy is Dabin Company. The policy year and the entity's accounting year coincide. The entity provided the following data for the current year: Cash surrender value, January 1 43,500 Cash surrender value, December 31 Annual advance premium paid January 1 Dividend received July 1 54,000 20,000 3,000 What amount should be reported as life insurance expense for the current year? O 17,000 20,000 6,500 9,500Following is a list of investments owned by Martinez Ltd., as of the company’s year-end, December 31, 2020: Investment No. Shares Cost Fair Value HFX Corporation 1,200 $9.00 $8.20 FDY Ltd. 2,100 6.50 6.55 CTN Corporation 3,700 7.00 7.60 On January 15, 2021, Martinez sold the shares in CTN Corporation for $8.10 per share. Prepare the journal entries required to record the sale, assuming the company uses the fair value through other comprehensive income without recycling method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 15, 2021 (To adjust to current fair value) (To record the sale of shares) (Reclassification…
- Asap1. Bob transfers assets with a $100,000 FMV (basis $60,000) and $70,000 of business-related liabilities to a corporation in exchange for 100% of the corporation's stock with a FMV of $30,000. The corporation assumes the $70,000 mortgage. The transfer qualifies under Sec. 351. What is Bob's gain recognized on the transfer? Group of answer choices $10,000 $40,000 $0 $30,000At December 31, 2019, Velasco Corporation had the following investments: Investment in debt securities, due 3/31/20 (purchased 12/31/19) P600,000 Investment in debt securities, due 1/31/20 (purchased 1/1/19) 900,000 Investment in ordinary shares acquired on 12/1/19 which are intended for short-term profit purposes. The company intends to sell the same by 2/28/20. 400,000 Investment in ordinary shares acquired on 12/31/18 which the client is intending to hold as available-for-sale. 300,000 Investment in preference shares acquired on 12/1/19 redeemable at the option of the issuer by 2/28/20. 300.000 90-day certificate of deposit, due 2/28/20 (acquired on 12/10/19) 500,000 180-day certificate of deposit, due 3/15/20 (acquired on 9/16/19) 800,000 Velasco Corporation should report cash equivalents in its December 31, 2019 statement of financial position at
- A Corporation is engaged in the trading business. The reported income and expenses for taxable year 2019 show: Sales P10,000,000 cost of sales 6,000,000 general business expenses 1,000,000 Interest on time deposit (gross) 100,000 Interest expense on loans payable 180,000 The net taxable income is A. 2,820,000 B. 2,853,000 C. 2,862,000 D. 2,858,000On January 1, 2019, Arwin Company purchased P2,000,000 ordinary life policy on its president. The entity reported the following data for 2022: Cash surrender value, January 1 Cash surrender value, December 31 50,000 60,000 Annual advance premium paid on January 1 Dividend received on July 1 The entity is the beneficiary under the life insurance policy. What amount should be reported as life insurance expense for 2022? 100,000 5,000 A. 100,000 В. 95,000 С. 85,000 D. 90,000For the last two years, Margaret Lane has Invested in the shares of Garod Inc. Details of her purchases and sales of these shares are as follows: Shares Purchased (Sold) Per Share Value January 2020 Purchase 300 $4.75 July 2020 Purchase 200 5.25 November 2020 Sale (250) 5.40 July 2021 Purchase 400 5.50 December 2021 Sale (150) 4.80 Determine Ms. Lane's taxable capital gains and allowable capital losses for 2020 and 2021.