Unformatted text preview: ount of its deferred tax
asset that it will not use. The valuation allowance is subtracted from the deferred
tax asset, which is then netted against the deferred tax liability ($17m - $2m =
$15m - $16m = a $1m liability. LO 6 S E-9 Recording a company’s defined contribution pension expense
Caribou Coffee Company offers employees a defined contribution pension plan.
At the end of fiscal 2009, the company contributed $100,000 to the plan. Prepare
the journal entry to record Caribou’s contribution to the pension plan.
Pension expense (+E, –SE) 100,000 Cash (–A)
= Liabilities + Cash –100,000 Stockholders’ Equity Pension expense (+E) –100,000 Page 8 of 21 END-OF-CHAPTER MATERIAL LO 7 S E-10 Recording a company’s other postretirement obligations expense
Disney Company offers employees post-retirement medical benefits. The table
below summarizes Disney’s expense associated with this benefit in 2009. Assume
Disney paid for this benefit with cash. Prepare the journal entry to record Di...
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- Spring '12
- Balance Sheet, Deferred tax, Generally Accepted Accounting Principles, Income tax in the United States