ACT_3392_Chp_22_Homework_Solutions

ACT_3392_Chp_22_Homework_Solutions - Intermediate...

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Intermediate Accounting II Amanda N. Paul, CPA, MBA Troy University
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Chapter 22 EXERCISE 22-1 (a) The net income to be reported in 2008, using the retrospective approach, would be computed as follows: Income before income tax $700,000 Income tax (35% X $700,000) 245,000 Net income $455,000 (b) Construction in Process 190,000 Deferred Tax Liability ($190,000 X 35%) 66,500 Retained Earnings 123,500* *($190,000 X 65% = $123,500)
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EXERCISE 22-2 (a)Inventory 14,000* Retained Earnings 14,000 *($19,000 + $23,000 + $25,000) – ($15,000 + $18,000 + $20,000) (b)Net Income (FIFO) 2005 $19,000 2006 23,000 2007 25,000 (c)Inventory 24,000* Retained Earnings 24,000 *($19,000 + $23,000 + $25,000) – ($12,000 + $14,000 + $17,000)
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EXERCISE 22-6 (a) Depreciation to date on equipment Sum-of-the-years’-digits depreciation 2005 (5/15 X $510,000) $170,000 2006 (4/15 X $510,000) 136,000 2007 (3/15 X $510,000) 102,000 $408,000 Cost of equipment $525,000 Depreciation to date 408,000 Book value (December 31, 2007)
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ACT_3392_Chp_22_Homework_Solutions - Intermediate...

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