Problem:
ABC Ltd. was formed on 1/1/X1 when shareholders contributed cash to the company in exchange for no-par stock. The company immediately used the cash to purchase a productive asset (PPE) that will generate end-of-year sales of $250 on 12/31/X1 and $200 on 12/31/The balance sheet immediately after formation is: ABC Ltd. Balance Sheet 1/1/X1 PPE$368.62 Stock holders' Equity$ 368.62 The asset historical cost, 368.62, also represents the present value of future sales to be generated from the PPE discounted at a 15% discount rate. Answer the following question: What amount will be reported for net income on the 12/31/income statement under present value accounting?