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    Determination of Capital Gain and Cash Flow

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    1. The Johnson Company bought a truck costing $24,000 two and a half years ago. The truck's estimated life was four years at the time of purchase. It was accounted for by using straight line depreciation with zero salvage value. The truck was sold yesterday for $19,000. What taxable gain must be reported on the sale of the truck?

    2. If the Johnson Company of Problem 1 is subject to a marginal tax rate of 34%, what is the cash flow associated with the sale of the used truck?

    5. McFadden Corp. reports the following balances on their December 31, 20X2 Balance Sheet:
    ($000)
    Accounts Payable 60
    Accounts Receivable 120
    Accumulated Depreciation 350
    Inventory 150
    Fixed Assets (Net) 900
    Long Term Debt 400
    Paid in Excess 160
    Retained Earnings 380
    Total Assets 1,240
    Total Liabilities 500 (long term debt + current liabilities)

    All of the remaining accounts are listed below. Calculate the balance in each.

    Accruals
    Cash
    Common Stock
    Fixed Assets (Gross)

    Total Current Assets
    Total Current Liabilities
    Total Equity

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    https://brainmass.com/business/statement-of-cash-flows/determination-of-capital-gain-and-cash-flow-403662

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    1. The Johnson Company bought a truck costing $24,000 two and a half years ago. The truck's estimated life was four years at the time of purchase. It was accounted for by using straight line depreciation with zero salvage value. The truck was sold yesterday for $19,000. What taxable gain must be reported on the sale of the truck?

    2. If the Johnson Company of Problem 1 is subject to a marginal tax rate of 34%, what is the cash flow associated with the sale of the used truck?

    5. McFadden Corp. reports the following balances on their December 31, 20X2 Balance Sheet:
    ($000)
    Accounts Payable 60
    Accounts Receivable 120
    Accumulated Depreciation 350
    Inventory 150
    Fixed Assets (Net) 900
    Long Term Debt 400
    Paid in Excess 160
    Retained Earnings 380
    Total Assets 1,240
    Total Liabilities 500 (long term debt + current liabilities)

    All of the remaining accounts are listed below. Calculate the balance in each.

    Accruals
    Cash
    Common Stock
    Fixed Assets (Gross)

    Total Current Assets
    Total Current Liabilities
    Total Equity

    $2.49

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