Answer:
$669,950
Explanation:
Computation of taxable income
Bali’s net book income before tax$605,800 Excess of book over tax depreciation25,600
Book gain on equipment sale$(23,000)
(53,000-27,400)
Tax gain on equipment sale38,000 15,000
(23,000-38,000=15,000)
Nondeductible loss on sale to related party 23,550
(75,000-51,450)
Taxable income$669,950
(605,800+25,600+15,000+23,550)
Therefore the taxable income will be $669,950
Answer:
Option (b) is correct.
Explanation:
The Journal entries are as follows:
(i) On November 1, 2015
Retained Earnings [$3 × 20,000] A/c Dr. $60,000
To Dividend Payable $60,000
(To record the declaration of dividend)
(ii) On November 30, 2015
Dividend Payable A/c Dr. $60,000
To cash A/c $60,000
(To record the payment of dividend)
Answer:
d. Net income is overstated and assets are overstated
Explanation:
The journal entry to record the depreciation expense is shown below:
Depreciation expense A/c Dr
To Accumulated depreciation A/c
(Being the depreciation expense is recorded)
But if depreciation is failed to record, then the net income is overstated and assets are overstated as the accumulated depreciation decrease the cash balance and The net income overstated represents the understated in an expense account
<span>A hypothesis is a specific prediction of how variables may be related; whereas a theory includes broad explanations and predictions concerning phenomena of interest. A theory is always backed by evidence but a hypothesis is only a suggested possible outcome. It can be tested and be proven to be right or wrong.</span>