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Acc124Exam2Spring2004SOLN1

Acc124Exam2Spring2004SOLN1 - DTA 15,780 DTL 6,390 Income...

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NAME____________________ EXAM #2 April 21, 2004 Chapters 18, 19 & 21 Summary of Exam Content Question Type Point Value Multiple Choice (on PageOut) 25 Problem 1 – Revenue Recognition 25 Problem 2 – Deferred Taxes 25 Problem 3 – Leases 25 Total 100 EXAM #2 / FALL 2003 / 1

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NAME____________________ PROBLEM 1 – Revenue Recognition (25 Points) Part A: Installment Sales Method (18 points) Year Installment Sales Method Cost Recovery Method 2004 11,700 150 2005 16,800 14,000 2006 22,650 18,900 Percentage-of-Completion Method (7 points) A. Costs incurred during 2004. = \$1,008,000 B. Costs incurred during 2005. = \$2,479,500 C. Percentage of completion as of December 31, 2006. = 100% D. Gross profit (loss) recognized during 2006. =\$1,487,500 EXAM #2 / FALL 2003 / 2
NAME____________________ PROBLEM 2 – Deferred Taxes (25 Points) Part A: Deferred Taxes (18 points) Income Tax Expense

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Unformatted text preview: DTA 15,780 DTL 6,390 Income Tax Payable 16,000 Income before taxes 40,000 Income tax expense Current 16,000 Deferred (9,390) 6,610 Net Income 33,390 Effective tax rate = 16.5% Part B: Net Operating Losses (7 points) Income tax refund receivable 205,100 Deferred tax asset 98,000 Income tax benefit 303,100 EXAM #2 / FALL 2003 / 3 NAME____________________ PROBLEM 3 – Leases (25 Points) 1. January 1, 2004. Leased equipment 850,000 Capital lease obligation 850,000 Capital lease obligation 101,668 Cash 101,668 2. December 31, 2004. Interest Expense 37,417 Interest Payable 37,417 Depreciation Expense 149,666 Accumulated Depn. 149,666 3. January 1, 2005. Capital lease obligation 112,083 Interest payable 37,417 Cash 149,500 The lease passes the economic life test. EXAM #2 / FALL 2003 / 4...
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Acc124Exam2Spring2004SOLN1 - DTA 15,780 DTL 6,390 Income...

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