A company failed to record unrealized gains of $26 million on its debt investments classified as trading securities. Its tax rat
1 answer:
Answer: Total shareholders' equity = $16.90 million
Explanation:
Unrealized gains or losses of trading securities investment will be recorded in retained earnings.
Unrealized gains (net of taxes) will increase the balance of retained earnings, which is a part of shareholders' equity. If unrealized gains are not recorded then the retained earnings is understated.
Unrealized gains (net of taxes) = Unrealized gains - Taxes
= $26 million - 35% of $26 million
= $26 million - $9.10 million
= $16.90 million
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Answer:
The second year’s depreciation for this equipment using the straight line method is 8,500
Explanation:
Depreciation: Depreciation is a decreasing value of the assets due to the tear & wear, obsolescence, usage,etc.
The formula to compute the depreciation under straight lie method is shown below:
=
=
= $8,500
The depreciation amount under straight line method should remain same over the estimated useful life
So, the second year’s depreciation for this equipment is $8,500