2. In the previous year, a firm failed to record premium amortizatio.docx - 2 In the previous year a firm failed to record premium amortization of

2. In the previous year, a firm failed to record premium amortizatio.docx

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2. In the previous year, a firm failed to record premium amortization of $41,900 and $29,600, respectively, on its bonds payable and held to maturity bond Investments. These errors affect both Income before tax and taxable income. The firm's tax rate is 30%. As a result of this error, net Income was: Multiple Choice O Overstated by $8.610. O Understated by $33.290. O Understated by $8.610. O Overstated by $33.290. Williams-Santana, Inc., is a manufacturer of high-tech industrial parts that was started in 2006 by two talented engineers with little business training. In 2018, the company was acquired by one of its major customers. As part of an internal audit, the following facts were discovered. The audit occurred during 2018 before any adjusting entries or closing entries were prepared. a. A five-year casualty insurance policy was purchased at the beginning of 2016 for $36.000. The full amount was debited to insurance expense at the time. b. Effective January 1, 2018, the company changed the salvage value used in calculating depreciation for its office building. The building cost $628.000 on December 29, 2007,
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  • Fall '17
  • Bob Maxwell

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