{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Acc124Exam2Spring2007SOLN

# Acc124Exam2Spring2007SOLN - NAME EXAM#2 Spring 2007 Problem...

This preview shows pages 1–4. Sign up to view the full content.

NAME_________________________ EXAM #2 Spring 2007 Problem Topic Point Value Multiple Choice (Blackboard) 25 1 Accounting for Taxes 25 2 Stockholders’ Equity 25 3 Share-based Compensation and EPS 25 TOTAL 100 GOOD LUCK! Exam #2 / Spring 2007 / Page 1 of 5

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
NAME_________________________ PROBLEM 1 – Accounting for Income Taxes (25 points) A. Deferred Taxes INSTRUCTIONS 1. Prepare the December 31, 2008, journal entry to record income tax expense, income taxes payable, and deferred taxes for Starfish. 2. Calculate net income for Starfish for the year ended December 31, 2008. 3. Calculate the effective tax rate for Starfish for the year ended December 31, 2008. Income tax expense \$156,000 DTA 22,000 DTL \$100,000 Income taxes payable 78,000 DTA = \$45,000*30% + \$25,000*34% DTL = \$50,000*30% + \$250,000*34% Income taxes payable = \$260,000*30% Net income = \$500,000 - \$156,000 = \$344,000 Effective tax rate = \$156,000/\$500,000 = 31.2% B. Net Operating Losses Required: 1. Prepare the journal entry to recognize the income tax benefit of the operating loss. Conch Shell elects the carryback option. 2. Calculate the net operating loss to be reported on Conch Shell’s 2008 income statement. Income tax refund receivable \$38,000 DTA 8,000 Income tax benefit \$46,000 Refund receivable = \$80,000*30% + 40,000*35% DTA = (\$140,000 – [\$80,000+\$40,000])*40% Net Loss on income statement = \$140,000 - \$46,000 = \$94,000 Exam #2 / Spring 2007 / Page 2 of 5
NAME_________________________ PROBLEM 2 – Shareholders’ Equity (25 points) Transaction* Total Assets Common Stock Add’l.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern