CHAPTER 17: ACCT FOR PENSIONS
Defined Contribution Plans
Dr. Pension Expense
[Total salary for year * % contribution]
Defined Benefit Plans
Projected Benefit Obligations
Annual Retirement Benefits Formula
> Salary in retirement yr * # of current
1. The Gator Company began a defined benefit pension plan for its one employee, Bob, on
1/1/2013. As of 1/1/2013, Bob has worked for the company for 25 years and is expected to retire
in 15 years. Bobs salary for 2013 is $90,000 and it is expected to be $
Indicate the nature of each of the situations described below using the following three-letter
CPR: Change in principle reported retrospectively
CPP: Change in principle reported prospectively
CES: Change in estimate
CRE: Change in
Accounting for Income
Income Tax Expense vs. Income Taxes
GAAP (accounting) income is used to determine
income tax expense, while IRS (taxable) income is
used to determine income taxes payable.
GAAP recognizes revenues and expen
Warranty expense ([4% x $2,000,000] $30,800).
Estimated warranty liability .
Bad debt expense (2% x $2,000,000).
Allowance for uncollectible accounts .
This is a loss cont
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 pro
Award: 1 out of 1.00 point
to provide working capital for yearend production. Blanton issued a fourmonth, 12% promissory note to
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
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
1. The following refers to the pension spreadsheet (columns have missing amounts) for
the current year for Pancho Villa Enterprises (PVE).
What was pension expense for the year?
Service cost (from PBO column) = $85
Interest cost (from PBO column) = $25
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 agree
March 17, 2017
Subject: Accounting for the Revenue Recognition
CoAx company, which manufactures and sells coaxial and fiber-optical cable,
sold 1000 feet of 18 American wire gauge coaxial cable to Ca
Chapter 15 - Leases
Questions for Review of Key Topics
Regardless of the legal form of the agreement, a lease is accounted for as either a rental
Chapter 21 - The Statement of Cash Flows Revisited
The Statement of Cash Flows Revisited
Questions for Review of Key
Acct 332. Chapter 15 (Leases) Practice Quiz problems and solutions.
1. On January 1, 2013, Better, Inc. entered into an equipment lease with Canyon Corp. under which
Better agrees to lease equipment that was manufactured by Canyon and that has an expected
The Statement of
Statement of Cash Flows
Financial statement which provides
information on the inflows and outflows of
cash & cash equivalents during the year
o Cash equivalents are highly liquid
investments that mature within 3 mon
Which of the following differences between financial accounting and tax accounting
ordinarily creates a deferred tax liability?
A. Depreciation early in the life of an
B. Unrealized losses from recording investments at
C. Rent collec
Current Liabilities &
Characteristics of Liabilities
Probable future sacrifices of economic
Arise from present obligations to other
Results from past transactions or events
Characteristics of Current
Chapter20 Accountils=Chanees andErrorCorrections. Supplement toExampl. #1.
Example changeinaccounting principle:
dividendsof 510 million and purchased inventory of 5500 million eachyear since zolL.Select
Sample Quiz 2
Last Name_ First Name _
1. ABC Inc. reported pretax accounting income of $500,000 for 2013. The following information
relates to differences between pretax accounting income and taxable income:
a) On 1/1/13, the company pur
Sample Quiz 1
Last Name_ First Name _
1. On October 1, Eder Fabrication borrowed $73 million and issued a nine-month, 7%
promissory note. Interest was payable at maturity.
1) Prepare the journal entry for the issuance of the no
C h 2 1 .S C F .N a t i o n a Il n t e r c a b l e I. n - c l a sesx a m p l e2 .
balancesheetsfor 201,3and 2012and the statementof incomefor 201,3are given
b e l o wf o r N a t i o n aIln t e r c a b l e
C o m p a n yA. d d i t i o n a
CAN—r31 623 scum») ACCT332
1. Under its executive stock option plan, American Corporation granted options on January 1,
2016, that permit executives to purchase 2,000,000 of the company’s $1 par common shares
within the next eight years, but not be