Chapter 16 - Accounting for Income Taxes
Chapter 16 Accounting for Income Taxes
True / False Questions
1. A temporary difference originates in one period and reverses, or turns around, in one or more later periods. True False
2. Expenditures currently ded
Most, but not all, changes in accounting principle are reported using the retrospective approach.
Prior years' financial statements are restated when the prospective approach is used.
The after-tax cumulative e
Mandatorily redeemable preferred stock is reported as a liability.
Noncash assets received as consideration for the issue of stock are always valued based on the fair value
of the stock.
Treasury stock transact
More difficult: Chapter 13
31. Current liabilities normally are recorded at their:
C. Maturity amount.
35. When cash is received from customers in the form of a refundable deposit, the cash account is
increased with a corresponding increase in:
A. A curre
The specific provisions of a bond issue are described in a document called a bond indenture.
Periodic interest expense is the stated interest rate times the amount of debt outstanding during the
A temporary difference originates in one period and reverses, or turns around, in one or more later
Expenditures currently deducted in the tax return but not included with expenses in the income statement
GAAP requires using intrinsic value accounting for employee stock options.
If previous experience indicates that a material number of stock options will be forfeited before they vest,
the fair value estimate of the options o
True / False Questions
1. Mandatorily redeemable preferred stock is reported as a liability.
2. Noncash assets received as consideration for the issue of stock are always valued
based on the fair value of the sto
The projected benefit obligation may be less reliable than the accumulated benefit obligation.
The amount of the vested benefit obligation is less than the projected benefit obligation and more than the
accumulated benefit o
Some liabilities are not contractual obligations and may not be payable in cash.
Amounts withheld from employees in connection with payroll often represent liabilities to third
A customer advance produ
At the inception of a lease agreement, the company's debt to equity ratio and rate of return on assets are
both affected whether the lease is classified as a capital lease or as an operating lease.
Capital leases are agreeme
Amounts held in cash equivalent investments must be reported separately from amounts held as cash in
the statement of cash flows.
If the direct method is used to report cash flows from operating activities in the body of the
1. At the beginning of its fiscal year, Lakeside Inc. leased office space to LTT Corporation
under a seven-year operating lease agreement. The contract calls for quarterly rent
payments of $25,000 each. The office building was acquired by Lakeside at a co
1. The projected benefit obligation was $80 million at the beginning of the year.
Service cost for the year was $10 million. At the end of the year, pension benefits
paid by the trustee were $6 million and there were no pension-related other
Holiday Brands issued $30 million of 6%, 30-year bonds for $27.5 million.
What is the amount of interest that Holiday will pay semiannually to bondholders?
A company issued 5%, 20-year bonds with a face amount of $80 million.
The market yield for bo
Project ACG4111 Spring 2014
Panther ID: 1291588
1) Reporting location of other comprehensive income using the FASBs Codification
Research System. Document your search steps and give the specific citation.
On the FASB Acc
Pretax accounting income
Municipal bond interest
Enacted tax rate
tax payable currently
Future taxable (deduct
ACG4111-u02-Financial Accounting II, Spring 2014
Wednesday 5:00 pm to 7:40 pm, Graham Center 283A
Instructor: Changjiang (John) Wang
Office: RB 241A
Office Hours: Wednesday 3:30 pm to 4:45
Question 1: figures are rounded. rate for cash payment
face value=annual statPay freq p calculation=
n for pv
2 market rate
20 PV of (i=7%, n=40)
cash paym annual market rate= for pv cal = PV of (i=4ingle amount
This is a take-home quiz for chapter 16. You should do it on the excel file and turn your
assignment in to the dropbox on the blackboard before the beginning of the class (03/19/2014).
You should show T-accounts along with all your entries.
1. Gallo Light
ACG4111 Spring 2014 QUIZ#4
Name (Last, First)
1. If the residual value of a leased asset turns out to be less than the amount guaranteed by the
A. Lessor must compensate the lessee for the excess.
B. Lessee must pay the lessor the
ACG4111 Spring 2014 QUIZ#6 Name (Last, First)
1. Bumble Bee Co. had taxable income of $7,000, MACRS depreciation of $5,000, book
depreciation of $2,000, and accrued warranty expense of $400 on the books although no
warranty work was performed.
This is a take-home quiz for chapter 14. You should do it on the excel file and submit the
assignment through the Blackboard by the beginning of the class (01/29/2014). You should also
show T-accounts along with all your entries.
1. On January 1, 2013, Sa
Quiz 3: Take-home quiz for Ch15 and 17 (to be due at the beginning of the class of 02/19/2014). You
should do it on the excel file and submit the assignment through the Blackboard.
1.General Industries manufacture s equipment for sale or lease. Special Co
The activities and interests of investors, companies, and markets are increasingly global. A single
set of high-quality globally accepted accounting standards is desirable as it can reduce countryby-country disparity in financial reporting and
CIK (company identification key number)
Filing date of 10-K
OCI-available for sale securities
OCI-foreign currency exchange
CROSS COUNTRY HEALTHCARE INC
Problem 17 12: 2013
PBO: $1,800 Discount rate: 10%
New Amendment: $400, amortization period: 10 years
Service cost: $520
Benefits paid: $380
No gain or loss on PBO
Plan asset: $1,600 Expected return rate: 12%
Actual return: $180
There will be 20 multiple choice questions from Chapter 13 and 30 multiple choice questions from
THESE TOPICS WILL NOT BE COVERED ON THE EXAM
Salaries, Commissions and Bonuses problems ( you should still know concepts)
Vacations, Sick D
Problem 15 8
Lease term: 4 yrs
Useful life: 6 yrs
Lessees rate: 12%
Lessors rate: 10%
Fair l 365 760 Cost: 365 760
F i value: 365,760; C t 365,760
Residual value: $25,000
Lessee guarantee the residual value
1A. How does less