At ruth company events and transactions during 2012, Ask an Expert

Accounting

At Ruth Company, events and transactions during 2012 included the following. The tax rate for all items is 30%.

(1) Depreciation for 2010 was found to be understated by $60,000.

(2) A strike by the employees of a supplier resulted in a loss of $50,000.

(3) The inventory at December 31, 2010 was overstated by $80,000.

(4) A flood destroyed a building that had a book value of $1,000,000. Floods are very uncommon in that area.

The effect of these events and transactions on 2012 net income net of tax would be

A) ($777,000).

B) ($833,000).

C) ($735,000).

D) ($35,000).

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M969765

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