Schaum's Outline Of Intermediate Accounting II, Second Edition (Schaum's Outline Series) 2nd Edition Baruch Englard - Solutions

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what is accounting?
Company T has the following information for years 2006–2007:2007 2007 Accounting Income Taxable Income Accounting Income Taxable Income Regular Income $3,000 $3,000 $4,000 $4,000 Difference #1 400 0 0 400 Difference #2 0 200 200 0 Difference #3 100 0 0 0 Totals $3,500 $3,200 $4,200 $4,400.20 .30
Company T has the following information for years 2003–2006:Income Before Tax Tax Rate Tax Paid 2003 $20,000 0.20 $4,000 2004 30,000 0.25 7,500 2005 40,000 0.20 8,000 2006 (100,000) 0.15 0 Assume it is more likely than not that future years will generate a positive net income, and the future tax
At December 31, 2007, Pension Corp. had a PBO of $120,000, an ABO of $100,000 and a pension fund balance of $95,000. It also had an accrued pension liability of $3,200.(a) What is the minimum pension liability?(b) How much additional liability, if any, must be recorded?
Pension Corp. had a January 1, 2008 pension fund balance of $90,000 and an actual return of 12%.Service cost, interest cost, amortization of prior service cost and amortization of an unrecognized gain were $6,000, $4,000, $3,000 and $1,000, respectively. Its expected return was 10%.(a) Find pension
Pension Corp. had a January 1, 2007 pension fund balance of $100,000. It contributed $30,000 and paid out benefits of $16,000. While its expected return was 9%, its actual return was only 7%. Find the December 31, 2007 balance of the pension fund.
Pension Corp. had a January 1 PBO of $80,000 and used a settlement rate of 10%. Its service cost and benefits paid were $6,000 and $14,000, respectively, while its actuaries reduced the PBO estimate by$5,000. Find the December 31 PBO.
Life insurance proceeds and life insurance premiums are examples of differences.
If accounting income is greater than taxable income, the result is a deferred tax .
In the entry for deferred taxes, the debit to income tax expense uses a figure.
Expenses incurred in Year 1 but not paid until Year 2 would be an example of a difference.
Tax differences that “turn around” with time are differences.
Loss carryforwards result in a deferred tax .
Loss carrybacks result in a tax .
Losses may be carried back for years, to the year first.
Losses may be carried forward for years.
The difference between the APBO in 1993 and the post retirement fund at the time, is called the amount.
The minimum liability is the excess of the at year-end versus the at year-end.
Ten percent of the larger of the January 1 PBO versus the January 1 pension fund is called the amount.
If the actuaries revise the PBO upward, the change is an unrecognized .
If total pension expense is greater than the employer contribution to the fund, the difference is a.
One of the components of pension expense is the return on the pension fund.
Pension expense contains components; post retirement expense contains components.
Interest cost is calculated using the rate.
The is the present value of future benefit payments, taking into account future salary increases.
Interest on municipal bonds creates a permanent difference between accounting income and taxable income.True–False B. Completion Questions. Fill in the blanks.
If Congress is discussing a new tax rate for future years, that tax rate should be used in the year of origination when setting up the deferred tax liability.True–False
For temporary differences, if accounting income is less than taxable income, the entry includes a deferred tax asset.True–False
Differences in depreciation methods are considered temporary.True–False
Permanent differences between accounting income and taxable income are called “timing differences.”True–False
Loss carrybacks result in tax refunds.True–False
Losses may be carried back 2 years and forward 25 years.True–False
Post retirement benefits may be recognized over twenty years.True–False
If the ABO at year-end exceeds the pension fund at year-end, the pension fund is underfunded.True–False
The excess of the year-end ABO over the year-end pension fund is called the maximum liability.True–False
If the actuaries revise the PBO downward, the change is an unrecognized gain.True–False
Prior service costs also include plan amendments.True–False
The expected return on the fund increases pension expense.True–False
If the contribution to the fund exceeds the pension expense, the excess is a prepaid asset.True–False
Post retirement expense has six components.True–False
Pension expense has six components.True–False
Interest cost is the increase in the ABO due to the passage of time.True–False
The PBO does not take into account future salary increases.True–False
22 Company T has “regular” income of $500 in 19A and 19B for both accounting and tax purposes.It also has two differences. One involves the recognition of revenue of $100 in 19A for accounting purposes and in 19B for tax purposes. The other involves the recognition of $80 in municipal interest
21 Company T has “regular” income of $600 in each of 19A and 19B. It also has life insurance premium expense in 19A of $100. The rate for each year is 20%. Prepare an entry for each year.
20 Assume the same information as in the previous problem except that the second difference, which is recognized in 19A for tax purposes, is permanent. Prepare entries for both years.
19 Company T has “regular” income of $800 for both accounting and tax purposes in each of 19A and 19B. It also has two temporary differences of $50 and $40, respectively. The $50 difference is recognized for accounting purposes in 19A and for tax purposes in 19B; the $40 difference is just the
18 Assume the same information as in Problem 11.16 except that the rate for 19C is 35%. Prepare entries for all years assuming that:(a) the rates for all years have already been enacted by Congress in 19A.(b) the 19C rate has not been enacted before 19C.
17 Assume the same information as in the previous problem except that the $300 difference is recognized for tax purposes partially in 19B ($200) and partially in 19C ($100). The rate for all years is 30%.Prepare the entries for 19A, 19B, and 19C. Assume that in 19C we once again have a
16 Company T had “regular” income of $500 each in 19A and 19B for both accounting and tax purposes.It also had a $300 difference which is recognized in 19A for accounting purposes and in 19B for tax purposes. The rate for all years is 30%. Prepare the required journal entry for both years.
15 Identify the following as either temporary tax differences or permanent differences:(a) Life insurance premiums paid in 19A(b) Revenue received in 19A but earned in 19B(c) Expenses incurred in 19A but paid in 19B(d) Life insurance proceeds collected in 19B(e) Use of LIFO for tax purposes and
14 Let’s assume in the preceding problem that it is more likely than not that positive income will be generated in future years and the future tax rates are expected to be 20%.(a) Do an entry in 19D for the carryforward(b) Show the income statement for 19D
13 Company T has the following information regarding its operations for the years 19B–19D:Income Before Tax Tax Rate Tax Paid 19B 175,000 30% 52,500 19C 50,000 25% 12,500 19D (300,000) 25% 0 Prepare an entry for 19D to record the refund due for taxes paid in previous years.
For permanent differences, both income tax expense and income tax payable are based upon income.
If accounting income is less than taxable income, the difference is a deferred tax ; if it is more, the difference is a deferred tax .
Income tax expense is based upon income, while income tax payable is based upon income.
The year in which a timing difference is created is the year of .
Interest on municipal bonds is a difference.
Revenue received in one year but earned in another is an example of a difference.
Differences that turn around with time are called or differences, while those that do not are differences.
Accounting income is based upon while taxable income is based upon rules.
The nature of the account Tax Benefit Due to Carryforward is that of a account.
The account Tax Benefit Due to Carryback is a type of account.
Operating losses may be carried back years and forward years.
29 Company J, in 1993, had an APBO of $30,000 and a post retirement fund of $25,000. The average remaining service life of its employees is 12 years.(a) Is the $5000 difference considered a net obligation or a net asset?(b) Over how many years can this amount be amortized?(c) What effect will the
28 Company I has an ABO of $150,000 and a pension fund of $125,000 at the end of 19A. Determine the additional liability to be recognized if:(a) the balance in the Accrued Pension Liability account is $18,000.(b) the balance in this account is $25,000.
27 Use the same information as in the previous question and assume that at the beginning of 19X2 the pension fund had a balance of $240,000 and the PBO was $250,000.(a) Determine the corridor amount.(b) If the average remaining service period is 10 years, determine the amortization for this
26 During 19X1 Company H had an expected rate of return of 10% on its beginning fund balance of$200,000. The actual rate of return, however, was 9%.Also during 19X1, the company actuaries revised the PBO downward by $28,000. Determine the net unrecognized gain or loss to be deferred to future
25 Company F has four employees whose expected remaining service years are as follows: No. 1, 6 years;No. 2, 2 years; No. 3, 3 years; No. 4, 5 years. If the unrecognized prior service cost is $160,000, determine the annual amortization under (a) the straight-line method and (b) the
24 Company E had a beginning-of-year pension fund balance of $70,000 and a beginning PBO of $50,000.The expected rate of return is 10%; the actual rate is 9%. The remaining expected service years of its employees is 18, and the settlement rate is 11%.(a) Which rate should be used in determining
23 Company D had service cost, interest cost, and amortization of prior service costs in the amounts of $19,000, $4,000, and $2,000, respectively. There were no unrecognized gains and losses, and the expected return on the fund was $5,000.If Company D contributed $24,000 into the fund, prepare the
22 Company C had pension expense during 19B of $70,000. Prepare the necessary journal entry if:(a) it contributed $70,000 into the fund.(b) it contributed $60,000.(c) it contributed $85,000.
21 Company B had a balance of $100,000 in its pension fund at the beginning of 19A. During the year it contributed $12,000 into the fund, paid out benefits of $7,000, and had an actual return of 10%.The expected rate of return, however, was 8%. Determine the ending balance in the fund.
20 Company A had a beginning PBO of $80,000; service cost and interest cost during the year were$8,000 and $7,000, respectively; changes in actuarial assumptions were −$3,000; and the ending PBO is $90,000. Determine benefits paid.
The accounting rules for post retirement benefits went into effect in .
The transition component of post retirement expense may be amortized over a period of years.
Health and dental benefits payable upon retirement are called .
When an additional pension liability has to be recorded, the credit goes to , and the debit goes to .
The minimum liability is the excess of the at year-end over the at year-end.
Ten percent of the larger of the PBO at beginning of year and the pension fund at that time is called the amount.
If the PBO is revised downward due to changes in actuarial assumptions, this revision is an gain.
Retroactive benefits granted to employees for services performed before the initiation of the pension plan are called .
The rate of return, rather than the rate of return, is used as a component of pension expense.
If the total pension expense is greater than the contribution to the fund, the difference is a .
The five components of pension expense are , , , , and .
Interest cost is based upon the beginning balance of the and uses a rate called the.
An item that can either add to or subtract from the PBO is .
The present value of the future benefits to be paid, taking into consideration expected future increases in salaries, is the .
If the annual contributions are undefined and the retirement benefits are defined, this type of plan is called a plan.
In 19B Company E discovers that it failed to record utility expense of $8,000 for 19A. An entry was made in 19B at the time of payment.(a) If this error is discovered before the 19B closings, what correction entry, if any, is required?(b) If this error is discovered after the 19B closings, what
On January 1, 2005, White Corporation purchases a machine for $25,000 with an estimated life of 12 years and an estimated salvage value of $3,000. During 2005 and 2006 White used the units of production method of depreciation resulting in depreciation of $2,000 and $1,000 respectively.Early in
Determine for each of the following items whether it belongs in the operating section, investments section, or finance section of the statement of cash flows:(a) Issued 1,000 shares preferred stock.(b) Paid a cash dividend.(c) Sold shares it owned of another company’s stock.(d) Purchased a
Company Q had the following information regarding its operation for 19C:Net income ($10,000)Depreciation expense 5,000 Decrease in accounts receivable 1,000 Increase in merchandise 4,000 Decrease in prepaid items 3,000 Decrease in accounts payable 4,000 Increase in wages payable 2,000 Amortization
Lessor rents a building to Lessee for 4 years beginning on January 1, 19A. Both the cost and the selling price to Lessor are $60,000. There will be four lease payments, beginning on January 1, 19A. The building has a 4-year life with no salvage value. Lessor’s target rate of return is 10%. Lessee
Prior period adjustments require the correction of the opening balance of .
A change to a presentation of consolidated statements versus separate statements is a change in.
If it is unclear as to whether an item is a change in principle or a change in estimate, it should be treated as a change in .
Changes in accounting estimates are not retroactive but are instead in nature.
Changes in accounting for construction contracts require the approach, and previous financial statements must be .
Changes to LIFO are of the type.

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Schaum's Outline Of Intermediate Accounting II, Second Edition (Schaum's Outline Series) 2nd Edition Baruch Englard - Solutions

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