Refer to the information for Raman Limited in E18-9. Following the year ended December 31, 2014, Raman
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(a) Prepare the necessary journal entry for Raman Limited to accrue the unrealized loss on its securities investments.
(b) Explain the tax treatment that should be given to the unrealized accrued loss that Raman Limited reported on its income statement.
(c) Calculate the deferred tax balance at December 31, 2015.
(d) Calculate the current tax expense for the year ending December 31, 2015.
(e) Prepare the journal entries to record income taxes for 2015. Assume that there have been no entries to the ending balances of deferred taxes reported at December 31, 2014.
(f) Prepare the income statement for 2015, beginning with the line "Income before income tax."
(g) Provide the presentation for the statement of financial position for any resulting deferred tax accounts at December 31, 2015. Be clear on the classification you have chosen and explain your choice.
(h) Prepare the journal entries in part (e) under the assumption that, late in 2015, the income tax rate changed to 28% for 2016 and subsequent years.
(i) Repeat the balance sheet presentation in part (g) assuming Raman reports under the ASPE future/deferred income taxes method and has chosen the fair value through net income model to account for its securities investments.
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...
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Related Book For
Intermediate Accounting
ISBN: 978-1118300855
10th Canadian Edition Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy
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