INTERMEDIATE ACCOUNTING RMU 9TH EDITION
9th Edition
ISBN: 9781260998726
Author: SPICELAND
Publisher: MCG
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Textbook Question
Chapter 8, Problem 8.10BE
LIFO liquidation
• LO8–6
Refer to the situation described in BE 8–8. Assuming an income tax rate of 40%, what is LIFO liquidation profit or loss that the company would report in a disclosure note accompanying its financial statements?
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Question 11: The taxable earnings threshold over which FUTA tax is not levied is:
Answer:
A.
O S7,000
В.
O $142,800
С.
S200,000
D.
S250,000
Intermediate Accounting ll ch 16
6. The information that follows pertains to Richards Refrigeration, Incorporated:
At December 31, 2024, temporary differences existed between the financial statement book values and the tax bases of the following:
($ in millions)
Book Value
Tax Basis
Future Taxable (Deductible) Amount
Buildings and equipment (net of accumulated depreciation)
$ 120
$ 90
$ 30
Prepaid insurance
50
0
50
Liability-Loss contingency
25
0
(25)
No temporary differences existed at the beginning of 2024.
Pretax accounting income was $200 million and taxable income was $145 million for the year ended December 31, 2024. The tax rate is 25%.
Required:
Complete the following table given below and prepare the appropriate journal entry to record income taxes for 2024.
What is the 2024 net income?
General Journal
Record 2024 income taxes
Transaction
General Journal
Debit
Credit
1
Problem 16-6 (IAA)
Complex Company reported the following information
relating to income before tax for accounting purposes:
2021
2022
2023
2024
Income tax rate
In 2021, the entity recognized doubtful accounts of P100,000.
The doubtful accounts were considered worthless or
uncollectible in 2022.
2,000,000
3,000,000
4,000,000
5,000,000
25%
Analysis of the tax and book records disclosed P120,000 in
unearned rent income on December 31, 2021 that had been
recognized as taxable income in 2021 when the cash was received.
Also on December 31, 2021, estimated warranty cost of
P300,000 had been recognized as expense on the books in
2021 when the product sales were made but is not deductible
for tax purposes until paid.
The unearned rent income on December 31, 2021 was
realized and the actual warranty payments were made in
the following years:
Rent income per book Actual warranty payments
40,000
40,000
40,000
2022'
2023
2024
20,000
80,000
200,000
Required:
1. Prepare journal entries for 2021,…
Chapter 8 Solutions
INTERMEDIATE ACCOUNTING RMU 9TH EDITION
Ch. 8 - Describe the three types of inventory of a...Ch. 8 - What is the main difference between a perpetual...Ch. 8 - The Cloud Company employs a perpetual inventory...Ch. 8 - The Bockner Company shipped merchandise to Laetner...Ch. 8 - What is a consignment arrangement? Explain the...Ch. 8 - Prob. 8.6QCh. 8 - The Esquire Company employs a periodic inventory...Ch. 8 - Prob. 8.8QCh. 8 - Its common in the electronics industry for unit...Ch. 8 - Explain why proponents of LIFO argue that it...
Ch. 8 - Prob. 8.11QCh. 8 - Describe the ratios used by financial analysts to...Ch. 8 - Prob. 8.13QCh. 8 - Prob. 8.14QCh. 8 - The Austin Company uses the dollar-value LIFO...Ch. 8 - Identify any differences between U.S. GAAP and...Ch. 8 - Determining ending inventory; periodic system ...Ch. 8 - Prob. 8.2BECh. 8 - Prob. 8.3BECh. 8 - Purchas e discounts; gross method LO83 On...Ch. 8 - Prob. 8.5BECh. 8 - Prob. 8.6BECh. 8 - Inventor y cost flow methods; perpetual system ...Ch. 8 - LIFO method LO84 Esquire Inc. uses the LIFO...Ch. 8 - LIFO method LO84 AAA Hardware uses the LIFO...Ch. 8 - LIFO liquidation LO86 Refer to the situation...Ch. 8 - Prob. 8.11BECh. 8 - Ratio analysis LO87 Selected financial statement...Ch. 8 - Dollar-value LIFO LO88 At the beginning of 2018,...Ch. 8 - Perpetual inventory system; journal entries LO81...Ch. 8 - Prob. 8.2ECh. 8 - Determining cost of goods sold; periodic inventory...Ch. 8 - Perpetual and periodic inventory systems compared ...Ch. 8 - Prob. 8.6ECh. 8 - Goods in transit; consignment LO82 The December...Ch. 8 - Physical quantities and costs included in...Ch. 8 - Prob. 8.9ECh. 8 - Prob. 8.10ECh. 8 - Prob. 8.11ECh. 8 - FASB codification research LO82, LO83 Access the...Ch. 8 - Inventory cost flow methods; periodic system ...Ch. 8 - Inventory cost flow methods; perpetual system ...Ch. 8 - Comparison of FIFO and LIFO; periodic system ...Ch. 8 - Average cost method; periodic and perpetual...Ch. 8 - FIFO, LIFO, and average cost methods LO81, LO84...Ch. 8 - Supplemental LIFO disclosures; LIFO reserve; AEP...Ch. 8 - LIFO liquidation LO81, LO84, LO86 The Reuschel...Ch. 8 - Dollar-value LIFO LO88 On January 1, 2018, the...Ch. 8 - Dollar-value LIFO LO88 Mercury Company has only...Ch. 8 - Dollar-value LIFO LO88 Carswell Electronics...Ch. 8 - Concepts; terminology LO81 through LO85 Listed...Ch. 8 - Various inventory transactions; journal entries ...Ch. 8 - Prob. 8.2PCh. 8 - Prob. 8.4PCh. 8 - Various inventory costing methods LO81, LO84...Ch. 8 - Various inventory costing methods LO81, LO84...Ch. 8 - Supple mental LIFO disclosures; Caterpillar LO84,...Ch. 8 - LIFO liquidation LO84, LO86 Taylor Corporation...Ch. 8 - LIFO liquidation LO84, LO86 Cansela Corporation...Ch. 8 - Prob. 8.11PCh. 8 - Integrating problem; inventories and accounts...Ch. 8 - Dollar-value LIFO LO88 On January 1, 2018, the...Ch. 8 - Dollar-value LIFO LO88 Kingston Company uses the...Ch. 8 - Dollar-value LIFO LO88 On January 1, 2018,...Ch. 8 - Prob. 8.1BYPCh. 8 - Real World Case 82 Physical quantities and costs...Ch. 8 - Judgment Case 83 The specific identification...Ch. 8 - Prob. 8.4BYPCh. 8 - Prob. 8.5BYPCh. 8 - Judgment Case 86 Goods in transit LO82 At the end...Ch. 8 - Ethics Case 87 Profit manipulation LO84 In 2017...Ch. 8 - Real World Case 88 Effects of inventory valuation...Ch. 8 - Real World Case 89 Effects of inventory valuation...Ch. 8 - Communication Case 810 Dollar-value LIFO method ...Ch. 8 - Prob. 8.11BYPCh. 8 - Prob. 8.CCTCCh. 8 - Prob. CCIFRS
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