Answer:
$400,000
Explanation:
Since at December 31, Year 5, Tedd's tax advisor believed that an unfavorable outcome was <u>probable</u>. And a <u>reasonable estimate </u>of additional taxes was $400,000 but could be as much as $600,000.
Although after the Year 5 financial statements were issued, Tedd received and accepted an IRS settlement offer of $450,000.
Tedd should have included an amount of $400,000 as accrued liability in its December 31, Year 5 balance sheet
The reason is that according to the International Financial Reporting Standards, a PROVISION must be made as long as the conditions below were obtainable at year end.
- Existing Condition (which in this case is the tax dispute with the IRS)
- Probable Cash Outflow (which Tedd's Tax adviser confirmed)
- Reliable Estimate of Outflow ( which the scenario stated ''A reasonable estimate of additional taxes was $400,000'')
Hence, such 'reasonable estimate is the appropriate amount for inclusion in the financial statements.
<span>Shane, who is interested in new ways to get more capital for his business that sells and services appliances, is highly protective of his company's information and often worries that it may fall into the wrong hands. With this state of mind, Shane is likely not interested in incorporating his money</span>
In this item, since the purchase has been made and that it was due to the agreement that that said amount is paid rather than a smaller one, the element that should be taken to the journal should be $1.7 in cash out column. The money is used to pay the liability. In this manner, the corporation will not have the need to physical call on someone to explain when the numbers in the journal do not match.
(A) Minimum dollar amount that can be in an account
Answer:
$109,085
Explanation:
From the question above RTF oil has a total sales of $911,500
The costs incurred by RTF oil is $787,300
Depreciation is $52,600
The tax rate is 21 percent
= 21/100
= 0.21
The first step is to calculate the EBIT
EBIT= Total sales-costs-depreciation
EBIT= $911,400-$787,300-$52,600
EBIT = $71,500
The next step is to calculate the tax
Tax= EBIT× tax rate
= $71,500×0.21
= $15,015
Therefore since we have gotten the tax and EBIT, the final stage is to calculate the operating cash flow
OCF= EBIT + depreciation- Tax
= $71,500+$52,600-$15,015
= $124,100-$15,015
= $109,085
Hence RTF oil has an operating cash flow of $109,085
