replied 2 years ago.
QUESTION 11Corresponds to CLO 3(c)
At December 31, 2013, Edwards Corporation reported a deferred tax liability of $245,000 which was attributable to a taxable temporary difference of $700,000. The temporary difference is scheduled to reverse in 2018. During 2014, a new tax law increased the corporate tax rate from 35% to 40%. Edwards should record this change by debiting
Retained Earnings for $35,000
Retained Earnings for $24,500
Income Tax Expense for $35,000
Income Tax Expense for $24,500
QUESTION 12Corresponds to CLO 3(d)
Operating income/(loss) and tax rates for Lombard Corporation for 2012 through 2015 were as follows: 2012: $150,000, 30%; 2013: $250,000, 35%; 2014: ($500,000), 35%; 2015: $700,000, 40%. Assuming that Lombard opts to carryback its 2014 NOL, what is the amount of income tax payable at December 31, 2015?
QUESTION 13Corresponds to CLO 4(a)
Granite Oaks Homebuilding, Inc. is a publicly traded corporation that follows generally accepted accounting principles. Granite Oaks has a defined benefit pension plan in place for its employees. Which of the following measures should Granite Oaks use to determine the company's pension liability?
Vested benefit obligation
Accumulated benefit obligation
Projected benefit obligation
Granite Oaks may use anyof the above measures.
QUESTION 14Corresponds to CLO 4(b)
Hathaway, Inc. sponsors a defined-benefit pension plan. The following data relates to the plan for 2013: Contributions to the plan, $450,000; Service cost, $500,000; Interest on projected benefit obligation, $445,000; Amortization of prior service cost due to increase in benefits, $85,000; Expected return on plan assets, $280,000. What amount should be reported for pension expense in 2013?
QUESTION 15Corresponds to CLO 4(c)
Johnson, Inc. sponsors a defined-benefit pension plan. The following balance sheet data relates to the plan on December 31, 2013: Plan assets (at fair value), $1,000,000; Accumulated benefit obligation, $1,450,000; Projected benefit obligation, $1,750,000. Contributions of $115,000 were made to the plan during the year. What amount should Johnson report as its pension liability on its balance sheet as of December 31, 2013?
QUESTION 16Corresponds to CLO 4(d)
Which of the following information about its pension plan would a company normally be required to disclose in the notes to the financial statements?
The number of employees enrolled in the defined-benefit plan.
The annual pension payments made to current retirees.
The amount of prior service cost changed or credited in previous years.
The rates used in measuring the benefit amounts.
QUESTION 17Corresponds to CLO 5(a)
Which of the following should be treated as a change in accounting principle?
A change from LIFO to FIFO for inventory valuation.
A change to a different method of depreciation for plant assets.
A change in the estimated useful life of plant assets.
A change from the cash basis of accounting to the accrual basis of accounting.
QUESTION 18Corresponds to CLO 5(b)
On January 1, 2011, Graham Corporation acquired machinery at a cost of $600,000. Graham adopted the double-declining balance method of depreciation for this machinery and had been recording depreciation over an estimated useful life of 10 years, with no residual value. At the beginning of 2013, a decision was made to change to the straight-line method of depreciation for the machinery. The depreciation expense for 2013 should be
QUESTION 19Corresponds to CLO 5(c)
During 2014, a construction company changed from the completed-contract method to the percentage-of-completion method for accounting purposes but not for tax purposes. Gross profit figures under both methods for the past three years follow. Completed-Contract: 2012, $595,000; 2013, $730,000; 2014, $810,000. Percentage-of-Completion: 2012, $700,000; 2013, $850,000; 2014, $900,000. Assuming an income tax rate of 40% for all years, the affect of this accounting change on prior periods should be reported by a credit of
$135,000 on the 2014retained earnings statement
$189,000 on the 2014retained earnings statement
$135,000 on the 2014income statement
$189,000 on the 2014income statement