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frozen [14]
3 years ago
9

Ford Corporation entered into a troubled debt restructuring agreement with their local bank. The bank agreed to accept land with

a carrying value of $200,000 and a fair value of $300,000 in exchange for a note with a carrying amount of $425,000. Ignoring income taxes, what amount should Ford report as a gain on its income statement?
Business
1 answer:
icang [17]3 years ago
7 0

Answer:

The answer is: $225,000

Explanation:

Ford should include a total gain of $225,000 in its income statement.

That gain is the result of the difference between the carrying value of the asset (land) and the carrying value of the liability (debt note).

$425,000 - $200,000 = $225,000 as total gain

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Your mutual fund was valued at $237,500. It has lost 6% per year for the last 3 years. What is its value today?
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Answer:

$197,263.7

Explanation:

The current value can be found by use of the compound interest formula. Since the asset has been losing value at 6 % per year,

the interest rate will be -6%

The formula for compound interest is  FV = PV × (1+r)^n

in this case

FV= current value

PV= $237,500

r= -6% or -0.06%

n= 3 years

Fv= $237, 500 x ( 1 + (-0.06)^3

Fv=$237,500 x (0.94)^3

Fv= $237,500 x 0.830584

Fv= $197,263.7

The current value =$197,263.7

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If you were seeking an entity with the most favorable tax treatment regarding (1) the number of owners allowed, (2) the flexibil
natima [27]

Answer: The correct answer is "A. C corporation".

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The manufacturing process used to make a wide variety of highly customized products typically in small quantities as small as on
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"Job Shop" would be the appropriate solution.

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