Black Canary Co. has asked for your assistance in preparing
Black Canary Co. has asked for your assistance in preparing their tax worksheet and to determine their 2020 tax expense and finalize their 2020 Income statement. They have also asked that you prepare a statement of cash flows as of 12/31/2020. They have provided you with a historical record of income and an expected future income schedule, the summary pretax income information and an (incomplete) balance sheet below, as well as some notes their accounting clerk made regarding activities over the past fiscal year. Historical and Expected Income Schedule:
Additional paid-in capital-preferred Retained earnings 7,000 50,000 700,000 120,000 441,225 100,000 400,000 50,000 296,100 ??? $1,178,300 Additional Information provided by the accounting clerk:
1. Canary believes that they will satisfy the contract terms for the final $7000 on customer advances in 2022.
2. The mortgage lending institution agreed to accept an issuance of common stock in satisfaction of $30,000 of the principle due.
3. Prior to extinguishing the mortgage payable interest of $17,000 was incurred. The interest expense is incorporated into Other operating expenses on the income statement of Black Canary Cash Co.
4. Canary uses the same inventory cost flow assumption for tax and financial reporting. Likewise, amortization of intangible assets is deducted at the same rate it is expensed.
5. Plant assets with an original cost of 900.000 were sold for 108.000 cash in February of 2019. 6. A new “Canary Cry Amplifier” was purchased for 950,000 in 2020. Canary estimates that the assets have a 5-year useful life with no salvage value. However, according to the MACRS the assets are deductible at a rate of 33%, 40%, 18%, and 9% in 2020 2021, 2022, and 2023 respectively.
Prepare and clearly identify (e.g. box, circle, highlight) the final tax expense journal entry that Canary would make for 2020.
a. Provide a completed tax worksheet with your final submission.
b. Provide and clearly label any background work associated with your tax worksheet (e.g. NOL schedule, depreciation schedules, etc.).
Stressed over that homework?
Essay deadline breathing down your neck?
Let’s cut to the chase: Why struggle when you can ace it with zero hassle?
Whether it’s essays, research papers, or assignments — we’ve got you covered.
✅ Expert writers ✅ 100% original work ✅ No AI tools, just real pros
We are GradeEssays.com, the best college essay writing service. We offer educational and research assistance to assist our customers in managing their academic work. At GradeEssays.com, we promise quality and 100% original essays written from scratch.
Contact Us
Enjoy 24/7 customer support for any queries or concerns you have.
