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During 2014, Liselotte Company earned income of $1,500,000

Intermediate Accounting | 15th Edition | ISBN: 9781118147290 | Authors: Donald E. Kieso ISBN: 9781118147290 164

Solution for problem 29 Chapter 4

Intermediate Accounting | 15th Edition

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Intermediate Accounting | 15th Edition | ISBN: 9781118147290 | Authors: Donald E. Kieso

Intermediate Accounting | 15th Edition

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Problem 29

During 2014, Liselotte Company earned income of $1,500,000 before income taxes and realized a gain of $450,000 on a government-forced condemnation sale of a division plant facility. The income is subject to income taxation at the rate of 34%. The gain on the sale of the plant is taxed at 30%. Proper accounting suggests that the unusual gain be reported as an extraordinary item. Illustrate an appropriate presentation of these items in the income statement.

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Accounting Notes 8/25/16 Basics of Financial Accounting Assets = Liabilities + Owner’s Equity Assets: Things you own (Property, Land, Equipment) Intangible Assets: franchises, trademarks, patents, copyrights, etc. – will go over this later on. Accounts receivable: money owed to us by customers Cash – critical; most liquid asset Inventory Prepaid expenses IN accounting – employees are liabilities and expenditures Assets are listed in order of liquidity; how fast you convert them to cash. In order of liquidity: 1. Cash 2. Accounts Receivable 3. Prepaid exp. 4. Inventory ( 5. Equipement 6. Buildings 7. Land Current asset – used up within a year or cycle Liabilities – things we owe 1. Payroll (wages or salaries) payable 2. Notes

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Chapter 4, Problem 29 is Solved
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Textbook: Intermediate Accounting
Edition: 15
Author: Donald E. Kieso
ISBN: 9781118147290

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During 2014, Liselotte Company earned income of $1,500,000