Journal Entry The following is a condensed trial balance of Bravo Co., Accounting Homework Help
Journal Entry The following is a condensed trial balance of Bravo Co., Accounting Homework Help
Question 5: 30% points:
The following is a condensed trial balance of Bravo Co., a publicly held company, after adjustments for income tax expense.
Bravo Co. |
||
Condensed Trial Balance |
||
|
Accounts |
12/31/2015 Balances Dr. (Cr .) |
12/31/2014 Balances Dr. (Cr.) |
|
Cash |
$484,000 |
$817,000 |
|
Accounts receivable, net |
670,000 |
610,000 |
|
Property, plant, and equipment |
1,070,000 |
995,000 |
|
Accumulated depreciation |
(345,000) |
(280,000) |
|
Dividends payable |
(25,000) |
(10,000) |
|
Income taxes payable |
(60,000) |
(150,000) |
|
Deferred income tax liability |
(63,000) |
(42,000) |
|
Bonds payable |
(500,000) |
(1,000,000) |
|
Unamortized premium on bonds |
(71,000) |
(150,000) |
|
Common stock |
(350,000) |
(150,000) |
|
Additional paid-in capital |
(430,000) |
(375,000) |
|
Retained earnings |
(185,000) |
(265,000) |
|
Sales |
(2,420,000) |
|
|
Cost of sales |
1,863,000 |
|
|
Selling and administrative expenses |
220,000 |
|
|
Interest income |
(14,000) |
|
|
Interest expense |
46,000 |
|
|
Depreciation |
88,000 |
|
|
Loss on sale of equipment |
7,000 |
|
|
Gain on extinguishment of bonds |
(90,000) |
|
|
Income tax expense |
105,000 |
_________ |
|
T otals |
$0 |
$0 |
Additional information:
> During 2015 equipment with an original cost of $50,000 was sold for cash, and equipment costing $125,000 was purchased.
> On January 1, 2015, bonds with a par value of $500,000 and related premium of $75,000 were redeemed. The $1,000 face value, 10% par bonds had been issued on January 1, 2006 to yield 8%. Interest is payable annually every December 31 through 2025.
> Bravo’s tax payments during 2015 were debited to Income Taxes Payable. Bravo recorded a deferred income tax liability of $42,000 based on temporary differences of $120,000 and an enacted tax rate of 35% at December 31, 2014; prior to 2014 there were no temporary differences. Bravo’s 2015 financial statement income before income taxes was greater than its 2015 taxable income, due entirely to temporary differences, by $60,000. Bravo’s cumulative net taxable temporary differences at December 31, 2015, were $180,000. Bravo’s enacted tax rate for the current and future years is 35%.
> 60,000 shares of common stock, $2.50 par, were outstanding on December 31, 2014.
> Bravo issued an additional 80,000 shares on April 1, 2015.
> There were no changes to retained earnings other than dividends declared.
Prepare a statement of cash flows using the indirect method.
