Intermediate Accounting

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
M131B: INTERMEDIATE ACCOUNTING CHAPTER 19 – ADDITIONAL PRACTICE PROBLEMS 1. Smiley Corporation purchased a machine on January 2, 2006, for $2,000,000. The machine has an estimated 5-year life with no salvage value. The straight-line method of depreciation is being used for financial statement purposes and the following MACRS amounts will be deducted for tax purposes: 2006 $400,000 2009 $230,000 2007 640,000 2010 230,000 2008 384,000 2011 116,000 Assuming an income tax rate of 30% for all years, the net deferred tax liability that should be reflected on Smiley's balance sheet at December 31, 2007, should be Deferred Tax Liability Current Noncurrent a. $0 $72,000 b. $4,800 $67,200 c. $67,200 $4,800 d. $72,000 $0 Use the following information for questions 2 through 4. Frizell Co. at the end of 2007, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income $ 750,000 Estimated litigation expense 1,000,000 Extra depreciation for taxes
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This document was uploaded on 03/15/2009.

Page1 / 4

M131Bch19additionalpracticeproblems - M131B: INTERMEDIATE...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online