{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Acc124Exam2Spring2007SOLN

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

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

View Full Document Right Arrow Icon
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
Image of page 1

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

View Full Document Right Arrow Icon
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
Image of page 2
NAME_________________________ PROBLEM 2 – Shareholders’ Equity (25 points) Transaction* Total Assets Common Stock Add’l.
Image of page 3

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

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    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.

    Student Picture

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

  • Left Quote Icon

    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.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    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.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern