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Intermediate Acct III Problems for Test

# Intermediate Acct III Problems for Test - ABE17-7 Zoop...

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ABE17-7 Zoop Corporation purchased for \$348,900 a 25% interest in Murphy, Inc. This investment enables Zoop to exert significant influence over Murphy. During the year Murphy earned net income of \$183,200 and paid dividends of \$61,100. Prepare Zoop's journal entries related to this investment. Description/Account Debit Credit (To record purchase) (To record the net income) (To record the dividend) ABE17-3 Carow Corporation purchased, as a held-to-maturity investment, \$52,100 of the 8%, 7-year bonds of Harrison, Inc. for \$57,985, which provides a 6% return. The bonds pay interest semiannually. Prepare Carows' journal entries for (a) the purchase of the investment, and (b) the receipt of semiannual interest and premium amortization. Assume effective interest amortization is used. (Round answers to zero decimal places, e.g. 25,510. List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.) Description/Account Debit Credit (a) (b)
ABE19-1 In 2010, Amirante Corporation had pretax financial income of \$168,600 and taxable income of \$126,100. The difference is due to the use of different depreciation methods for tax and accounting purposes. The effective tax rate is 40%. Compute the amount to be reported as income taxes payable at December 31, 2010. \$ ABE19-2 Oxford Corporation began operations in 2010 and reported pretax financial income of \$222,000 for the year. Oxford's tax depreciation exceeded its book depreciation by \$42,300. Oxford's tax

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