FinQuizcom 2017 All rights reserved 4257 The payment of a stock dividend is

Finquizcom 2017 all rights reserved 4257 the payment

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FinQuiz.com © 2017 -­ All rights reserved. 42 57. The payment of a stock dividend is most likely : Reference: CFA Level 1, Volume 3, Study Session 8, Reading 26, LOS c 58. The exhibit below highlights selective financial information from Klienveldt Incorporated’s balance sheet and cash flow statement for the years 2012 and 2013. The company uses the direct format for preparing its cash flow statement. $’000s 2013 2012 Change Wages payable 48 35 + 13 Taxes payable 169 180 – 11 Deferred tax asset 32 30 Cash paid for income taxes 78 74 Cash paid to employees 15 15 The amount of income tax and wages expense reported by Kleinveldt in its income statement for the year 2013 is closestto: income tax expense: wages expense: + 2 + 4 0
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CFA Level I Mock Exam 3 – Solutions (PM) FinQuiz.com © 2017 -­ All rights reserved. 43 Reference: CFA Level 1, Volume 3, Study Session 8, Reading 26, LOS f 59. In 2013, Trans Inc. reported $250,000 as income tax payable based on income for tax purposes. The tax expense reported on its income statement is equal to $180,000. Trans Inc. will most likely report the difference between the two tax amounts as: Reference: CFA Level 1, Volume 3, Study Session 8, Reading 25, LOS d When the actual income tax payable based on income for tax purposes exceeds (is lower than) the amount of income tax based on reported financial statement income, a deferred tax asset (liability) is reported on a company’s balance sheet.
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CFA Level I Mock Exam 3 – Solutions (PM) FinQuiz.com © 2017 -­ All rights reserved. 44
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