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14) Masons' balance sheet shows a defined benefit asset of $740,000. Records show that there are $89,000 of past service costs and $610,000 of actuarial losses that remain unamortized. Required: Using the pension reconciliation required in the company's note disclosures, determine the pension plan's surplus or deficit. 15) Feldman has a defined benefit.
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27) Two different companies have many similarities, including the following: ?They both earned net income of $3,500,000 for the year ended December 31, 2017; ?They are both subject to a 35% tax rate; ?The average price of the companies' ordinary shares during the year was $26; and ?Each company had 1,400,000 ordinary shares outstanding.
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23) The following data represent the differences between accounting and tax income for Seafood Imports Inc., whose pre-tax accounting income is $650,000 for the year ended December 31. The company's income tax rate is 45%. Additional information relevant to income taxes includes the following. a. Capital cost allowance of $270,000 exceeded.
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18) Calculate the income effect on the incremental EPS for the following instrument: Convertible bonds outstanding, yield of 6% and coupon rate of 6% $2,000,000 Issue date January 1, 2015 Maturity date December 31, 2018 Conversion rate for each $1,000 bond 20 ordinary shares Income tax rate 25% A) 0.75 B) 2.25 C) 40,000 D) 90,000 19) Calculate the share effect on the incremental EPS.
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11) Which statement is correct? A) Dilutive potential ordinary shares, if converted, will decrease EPS or decrease the loss per share from continuing operations. B) Dilutive potential ordinary shares, if converted, will increase EPS or increase the loss per share from continuing operations. C) Antidilutive potential ordinary shares, if converted, will increase EPS.
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19) Prepare the Summarized Pension Actuary's Report on Pension Plan Obligations (without numbers) in good form. 20) A company reported $430,000 of pension expense in its income statement. The company fully paid the amount of pension expense owed to the trustee. The balance sheet showed that the pension asset increased by.
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23) A company has a defined benefit pension asset of $1,050,000 at the beginning of the year. The company contributes $5,500,000 to the pension during the year and records a pension expense of $8,200,000.   Required: Determine the value of the defined benefit pension liability at year-end. $1,650,000 cr 24) A company has a defined.
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25) The following information relates to the accounting income for Ontario Uranium Enterprises (OUE) for the current year ended December 31. Income before taxes$850,000 Membership fees—non deductible for tax20,000 Depreciation and depletion expense380,000 CCA470,000 Loss on disposal of equipment (see additional info below)75,000 Tax rate30% During the year, the company sold one of its machines with carrying.
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17.4   Learning Objective 4 1) What four accounts are affected by the accounting for a defined benefit pension plan? A)  Cash, pension expense, OCI, and the defined benefit asset or liability B) Expected gains and losses, cash, income, pension expense C) Pension liability, pension expense, cash, income D) Pension expense, pension assets, pension liability, cash 2).
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16.2   Learning Objective 2 1) Which of the following is an example of a "permanent difference"? A) Warranty provisions. B) Dividends received by corporations. C) Depreciation on capital assets. D) Completed contract method. 2) Describe what is meant by a permanent difference. 3) Describe what is meant by a timing difference. 4) Match the following terms with their.
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20) What is the income tax payable under the deferral method for FY2017? FY2016 FY2017 FY2018 Income before tax 120,000 110,000 120,000 Taxable income 85,000 95,000 105,000 Tax rate 30% 25% 30% A) $23,750 B) $25,500 C) $27,500 D) $36,000 21) What is the income tax payable under the deferral method for FY2018? FY2016 FY2017 FY2018 Income before tax 120,000 110,000 150,000 Taxable income 85,000 95,000 105,000 Tax rate 30% 25% 35% A) $27,500 B) $36,000 C) $36,750 D) $52,500 22) What is the deferred tax liability under the deferral.
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8) What amount is included in the pension reconciliation for the balance sheet? A) Current service cost. B) Unamortized actuarial gains. C) Benefit paid. D) Contributions paid. 9) What amount will be presented on the balance sheet for fiscal 2017? Fiscal 2016 Fiscal 2017 Fair value of pension plan assets 50,000,000 45,000,000 Accrued pension obligation 60,000,000 42,000,000 Contributions 7,000,000 10,000,000 Benefits 8,000,000 8,000,000 A) $3,000,000 surplus B) $3,000,000 deficit C) $5,000,000 D) $8,000,000 10).
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27) Which statement is correct? A) Undepreciated capital cost (UCC) is the net carrying amount of an asset or asset class for tax purposes. B) A deductible temporary difference is a temporary difference that results in future taxable income being more than accounting income. C) A terminal loss is the tax loss arising.
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6) Summarize the rules covering presentation and disclosure of the following items according to IFRS using the following template: Item Presentation and Disclosure Income tax expense Composition of income tax expense Taxes on discontinued operations Comprehensive income Permanent differences Offsetting Different jurisdiction and component entities According to source Tax losses carried forward .
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13) Indicate whether the item will result in a deductible temporary difference, taxable temporary difference or neither. Item Deductible temporary difference Taxable temporary difference Neither Rent revenue collected in advance that is taxable in the year received CCA that exceeds depreciation expense for property, plant, and equipment Membership dues that are not deductible Percentage of completion income that.
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21) For each of the following differences between the amount of taxable income and income recorded for financial reporting purposes, compute the effect of each difference on deferred taxes balances on the balance sheet. Treat each item independently of the others. Assume a tax rate of 30%. ?Income before income taxes.
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10) How much tax would be reported under the taxes payable method for F2018? F2016 F2017 F2018 Income before tax 120,000 110,000 120,000 Taxable income 85,000 95,000 105,000 Tax rate 30% 25% 30% A) 25,500 B) 31,500 C) 33,750 D) 36,000 11) Which statement is accurate? A) Accounting income is generally higher than taxable income. B) Accounting income is determined by financial reporting. C) The balance sheet is unaffected by the tax accounting.
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30) The net income for Cedarsprings Retreat Centre for the year ended December 31, 2017, was $800,000. Cedarsprings had 50,000 ordinary shares outstanding at the beginning of the year. Cedarsprings declared and distributed a three-for-one stock split on May 1, 2017 and issued (sold) 30,000 ordinary shares on November 1,.
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4) Summarize the rules covering presentation and disclosure of the following items according to IFRS using the following template: Item Presentation and Disclosure Income Tax Expense Composition of Income Tax Expense Taxes on discontinued operations Comprehensive income Permanent Differences Offsetting Different jurisdiction and component entities According to source Tax losses carried forward 5) Under ASPE, Section 3465 indicates less onerous disclosures as.
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9) Which of the following component refers to the benefits earned by employees in a defined benefit plan? A) Interest cost on pension obligations. B) Income from plan assets. C) Amortization of past service cost. D) Amortization of actuarial gains and losses. 10) Which of the following component refers to the services provided by the.
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15) During its first year of operations, Karol Corp. reported the following information: ?Income before income taxes for the year was $550,000 and the tax rate was 35%. ?Depreciation expense was $100,000 and CCA was $50,000. ?Warranty expense was reported at $20,000, while actual cash paid out was $10,000. ?$25,000 of expenses included in.
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17) Changing Assumptions Ltd. has the following details related to its defined benefit pension plan as at December 31, 2013: Pension fund assets of $1,900,000 and Actuarial obligation of $1,806,317. The actuarial obligation represents the present value of a single benefit payment of $3,200,000 that is due on December 31, 2019,.
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16.3   Learning Objective 3 1) How much tax expense would be recorded under the accrual method for FY2017? FY2016 FY2017 Deferred tax liability 30,000 Revenue 130,000 Taxable income 95,000 Tax rate 30% 25% A) 5,000 B) 27,500 C) 32,500 D) 37,500 2) How much tax expense would be recorded under the accrual method for FY2017? FY2016 FY2017 Deferred tax liability 30,000 Revenue 130,000 Taxable income 95,000 Tax rate 30% 35% A) 5,000 B) 40,500 C) 32,500 D) 50,500 3) How much tax expense.
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16.1   Learning Objective 1 1) Which statement is correct? A) Financial reporting rules are generally consistent with tax reporting rules. B) Tax rules are generally consistent the principles used in accrual accounting. C) Tax rules generally require a higher degree of reliability than financial reporting. D) Accounting income is generally similar to taxable income. 2) What.
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5) Which of the following is true? A) A deductible temporary difference is a temporary difference that results in future taxable income being more than accounting income. B) A Deferred Tax Liability is the amount of income tax payable in future deferred tax liability periods as a result of taxable permanent differences. C).
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15.3   Learning Objective 3 1) Which statement is correct? A) Diluted EPS will always be less than basic EPS. B) Diluted EPS will always be greater than basic EPS. C) Diluted EPS will always be equal to EPS. D) Diluted EPS will be less than or equal to basic EPS. 2) Which statement is correct? A) The.
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11) What adjustment is required to the opening deferred taxes as a result of the rate change? Opening deductible (taxable) temporary differences (400,000) Current year deductible (taxable) temporary differences (100,000) Tax rate (prior year) 30% Tax rate (current year) 40% A) 40,000 debit B) 40,000 credit C) 130,000 credit D) 190,000 credit 12) What is the ending balance of the current year deferred.
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17.2   Learning Objective 2 1) What is the pension expense for the following plan? "The plan requires the company to contribute $500 for each of its 1,000 employees. The plan hopes to accumulate enough funds so that each retiree receives $20,000 in the future; the company has no obligation to guarantee the.
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16.5   Learning Objective 5 1) For the year ended October 31, 2018, NB Financial Group (National Bank) reported income before tax of $2,160 million and income tax expense of $274 million, for an effective tax rate of 12.7% ($274m / $2,160m). In the notes to the financial statements, NB's disclosures included.
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8) Which statement is correct about the "income effect" on EPS? A) This is the incremental before-tax income available to ordinary shareholders. B) This is the incremental after-tax income available to ordinary shareholders. C) This is the incremental number of ordinary shares outstanding before conversion. D) This is the incremental number of ordinary shares.
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14) What are actuarial losses or gains in a defined benefit plan? A) Plan amendments that retrospectively improve pension plan benefits. B) Expected income earned on the pension plan assets. C) Difference arising between the actual and the expected value of plan obligations. D) Differences arising between the actual and expected values of the.
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30) Five Star Hotels provides a defined benefit pension for its employees. At the end of fiscal year 2016, which ended on December 31, the pension plan supplied Five Star Hotels with information about the pension, which is summarized in the following tables: Opening assets, January 1 $ 2,100,000 + Funding 500,000 + Expected return.
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44) Micky and Donald Corp. was founded on January 1, 2018. At that time it issued 120,000 ordinary shares and 20,000, $30, cumulative 5% preferred shares. Subsequent transactions affecting its shareholdings follow. 2018 ?September 1: Micky issued 300,000, $30, non-cumulative 6% preferred shares. ?December 1: Micky issued 80,000 ordinary shares. ?Dividends were not declared.
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17.3   Learning Objective 3 1) Which statement best explains the meaning of "current service cost"? A) The present value of pension benefits that employees have earned. B) The increase in the present value of a defined benefit obligation resulting from employee service in the current period. C) The amount of funds deposited with the.
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17.1   Learning Objective 1 1) Which of the following best describes a "defined benefit plan"? A) High returns in the pension plan result in higher benefit payments to the employees in the future. B) A pension plan that specifies how much funds the employee needs to contribute. C) A plan that requires the employer.
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15.4   Learning Objective 4 1) Which statement is correct? A) Out of the money stock options are the most dilutive. B) Convertible bonds are the most dilutive. C) Convertible preferred shares are the most dilutive. D) In the money stock options are the most dilutive. 2) Which statement is correct about diluted EPS? A) The incremental EPS.
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16.4   Learning Objective 4 1) Which statement is correct? A) The income tax system treats income and losses symmetrically. B) The income tax system treats income and losses asymmetrically. C) When a company has a loss, a refund is received equal to the loss multiplied by the tax rate. D) A loss carryforward has immediate.
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