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4 years ago

Exercise 4-8 Discontinued operations; disposal in subsequent year [LO4-4]

Business

1 answer:

mezya [45]4 years ago

8 0

Answer:

The net income for 2018 is $292,800.

Explanation:

The question is to calculate the partial Income Statement for 2018

Kandon Enterprise Inc.

Partial Income Statement for the Year Ended 31st December, 2018

Particulars/ Description Amount

Continuing Operations Income $420,000

Discontinued Operations gain (loss)

Loss from Operations of the Component Disc. ($212,000)

Income tax benefit (40% of 212,000) <u>$84,800</u>

Loss on the discontinued Operations <u> ($127, 200)</u>

<u>Net income for the year $292,800 </u>

N.B Calculation of the Loss on discontinued Operations

Loss from operations 160,000

Impairment loss ($272,000-$220,00) 52,000

Net before tax loss $212,000

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2 years ago

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On March 31, 2019, Home Decorating Pavilion received a bank statement showing a balance of $9,670. The balance in the firm's che

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Answer and Explanation:

1. The preparation of bank reconciliation statement is shown below:-

Home Decorating Pavilion

Bank Reconciliation

Cash balance per bank, March 31 $9,760

Add: Deposit in transit $2,795

Bank Error $605 $3,400

Less: Outstanding checks

358 $445

359 $1,570 $2,015

Reconciled Bank Balance $11,145

Cash balance per books, March 31 $9,832

Add: Collection of Notes Receivable$1,540

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Error in Recording Check No 341 $100 $1,640

($900 - $800)

Less: Bank service charge $17

NSF check $485 $502

Reconciled Cash Balance $10,970

2. The Journal entry is shown below:-

a. Cash Dr, $1,540

($1,400 + $140)

To Notes receivable $1,400

To Interest income $140

(Being cash is recorded)

b. Cash Dr, $100

($900 - $800)

To rent expenses $100

(Being cash is recorded)

c. Accounts receivable Dr, $485

To cash $485

(Being accounts receivable is recorded)

d. Miscellaneous Dr, $17

To cash $17

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3 years ago