Answer:
Canton Corporation
Income Statement for December 31, 2016
$
income from continuing operations before income taxes 110,000
Less: Income Tax 30% <u>38,500</u>
Income from continuing operations 71,500
Gain on disposal of discontinued component 28,000
Tax on disposal of discontinued component (8,400)
Loss from operations of discontinued component <u>(50,000)</u>
Net loss from discontinue operations <u>(30400)</u>
Total Comprehensive Income <u>41,100</u>
Answer:
The Option B is correct.
Explanation:
The International Financial Reporting Standards gives two option to report the finance costs in the statement of cash flow. The first option the firm has is that the finance cost must be reported in the operating activities because these interest cost arise because firm borrows money to finance its operations. The other option is the firm has option to include it in the financing section of the statement of cash flows because it might had invested in stocks which must be deducted from the financing activities.
Whatever the option firm choses must relate to the facts and must increase the truth and fairnes of the statement and it must also applied consistently in future as well. US GAAP says that the finance cost must be deducted from the operating activities in the statement of cash flows.
Answer: $8
Explanation:
Given that,
Book value of a bond = $100
Market value of the bond (principal + interest payable) = $120
Discount rate when bond was issued = 10%
Discount rate prevailing at the beginning of the year = 8%
Therefore, Discount amount = 0.08 × $120
= $9.6
Payments to bondholders = $7
The bond was bought back(Repurchase price) for $95 at the end of the year
Net worth at the end of 1 year = Market value - Discount amount - Payments to bondholders
= $ 120 - 9.6 - 7
= $103.4
Net gain / loss = Net worth at the end of 1 year - Repurchase price
= $103.4 - $95
= $8.4
= $8 (approx)
<span>Assuming that everything Anthony sells is profit and subject to tax; Anthony will need to sell $60,000. Since he will lose $16,000 (30%) to tax, he will be at his magic number of $42,000.</span>