ACCT 557 Week 3 Quiz (03 sets)
ACCT 557 Week 3 Quiz 1
1. (TCO B) Zeff Co. prepared the following reconciliation of its pretax financial statement income to taxable income for the year ended December 31, Year 1, its first year of operations: Pretax financial income $160,000 Nontaxable interest received on municipal securities (5,000) Long-term loss accrual in excess of deductible amount 10,000 Depreciation in excess of financial statement amount (25,000) Taxable income $140,000 Zeff's tax rate for Year 1 is 40%.In its Year 1 income statement, what amount should Zeff report as income tax expense-current portion?
2. (TCO B) On its December 31, Year 2, balance sheet, Shin Co. had income taxes payable of $13,000 and a current deferred tax asset of $20,000 before determining the need for a valuation account. Shin had reported a current deferred tax asset of $15,000 at December 31, Year 1. No estimated tax payments were made during Year 2. At December 31, Year 2, Shin determined that it was more likely than not that 10% of the deferred tax asset would not be realized. In its Year 2 income statement, what amount should Shin report as total income tax expense?
3. (TCO B) Hut Co. has temporary taxable differences that will reverse during the next year and add to taxable income. These differences relate to noncurrent assets. Under U.S. GAAP, deferred income taxes based on these temporary differences should be classified in Hut's balance sheet as a:
4. (TCO B) For the year ended December 31, 1993, Grim Co.'s pretax financial statement income was $200,000 and its taxable income was $150,000. The difference is due to the following: Interest on municipal bonds $70,000 Premium expense on keyman life insurance (20,000) Total $50,000 Grim's enacted income tax rate is 30%. In its 1993 income statement, what amount should Grim report as current provision for income tax expense?
5. (TCO B) Stone Co. began operations in Year 1 and reported $225,000 in income before income taxes for the year. Stone's Year 1 tax depreciation exceeded its book depreciation by $25,000. Stone also had nondeductible book expenses of $10,000 related to permanent differences. Stone's tax rate for Year 1 was 40%, and the enacted rate for years after Year 1 is 35%. In its December 31, Year 1, balance sheet, what amount of deferred income tax liability should Stone report?
ACCT 557 Week 3 Quiz 2
1. (TCO C) Presented below is pension information related to Woods, Inc. for the year 2013. Service cost $84,000 Interest on projected benefit obligation $46,000 Interest on vested benefits $30,000 Amortization of prior service cost due to increase in benefits $14,000 Expected return on plan assets $21,000 The amount of pension expense to be reported for 2013 is
2. (TCO C) A pension asset is reported when
3. (TCO C) Post-retirement benefits may include all of the following except
4. (TCO C) Kathy's Kittens, Inc. has provided the following information for their post-retirement benefits plan for 2013. Service cost $475,000 Discount rate 8% APBO, January 1, 2013 $3,800,000 EPBO, January 1, 2013 $4,100,000 Average remaining service to full eligibility 20 years Average remaining service to expected retirement 25 years The amount of post-retirement expense for 2013 is
5. (TCO C) On January 1, 2013, Laura's Living Company has the following defined benefit pension plan: The interest (settlement) rate applicable to the plan is 10%. On January 1, 2014, the company amends its pension agreement so that service costs of $335,000 are created. Other data related to the pension plan are as follows. Required: (a) Prepare a pension worksheet for the pension plan for 2013 and 2014. (b) For 2014, prepare the journal entry to record pension-related amounts.
6. (TCO C) Kasper, Inc. sponsors a defined-benefit pension plan. The following data relates to the operation of the plan for the year 2013. Service cost $350,000 Contributions to the plan $225,000 Actual return on plan assets $185,000 Projected benefit obligation (beginning of year) $3,400,000 Fair value of plan assets (beginning of year) $3,300,000 The expected return on plan assets and the settlement rate were both 9%. The amount of pension expense reported for 2013 is