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Multiple Choice?CPA Adapted;95. Munoz Corp.'s books showed pretax financial income of $1,500,000 for the year ended December 31, 2011. In the computation of federal income taxes, the following data were considered;Gain on an involuntary conversion $650,000;(Munoz has elected to replace the property within the statutory;period using total proceeds.);Depreciation deducted for tax purposes in excess of depreciation;deducted for book purposes 100,000;Federal estimated tax payments, 2011 125,000;Enacted federal tax rate, 2011 30%;What amount should Munoz report as its current federal income tax liability on its December 31, 2011 balance sheet?;a. $100,000;b. $130,000;c. $225,000;d. $255,000;96. Haag Corp.'s 2011 income statement showed pretax accounting income of $750,000. To compute the federal income tax liability, the following 2011 data are provided;Income from exempt municipal bonds $ 30,000;Depreciation deducted for tax purposes in excess of depreciation;deducted for financial statement purposes 60,000;Estimated federal income tax payments made 150,000;Enacted corporate income tax rate 30%;What amount of current federal income tax liability should be included in Hagg's December 31, 2011 balance sheet?;a. $48,000;b. $66,000;c. $75,000;d. $198,000;97. On January 1, 2011, Gore, Inc. purchased a machine for $720,000 which will be depreciated $72,000 per year for financial statement reporting purposes. For income tax reporting, Gore elected to expense $80,000 and to use straight-line depreciation which will allow a cost recovery deduction of $64,000 for 2011. Assume a present and future enacted income tax rate of 30%. What amount should be added to Gore's deferred income tax liability for this temporary difference at December 31, 2011?;a. $43,200;b. $24,000;c. $21,600;d. $19,200;98. On January 1, 2011, Piper Corp. purchased 40% of the voting common stock of Betz, Inc. and appropriately accounts for its investment by the equity method. During 2011, Betz reported earnings of $360,000 and paid dividends of $120,000. Piper assumes that all of Betz's undistributed earnings will be distributed as dividends in future periods when the enacted tax rate will be 30%. Ignore the dividend-received deduction. Piper's current enacted income tax rate is 25%. The increase in Piper's deferred income tax liability for this temporary difference is;a. $72,000.;b. $60,000.;c. $43,200.;d. $28,800.;99. Foltz Corp.'s 2010 income statement had pretax financial income of $250,000 in its first year of operations. Foltz uses an accelerated cost recovery method on its tax return and straight-line depreciation for financial reporting. The differences between the book and tax deductions for depreciation over the five-year life of the assets acquired in 2010, and the enacted tax rates for 2010 to 2014 are as follows;Book Over (Under) Tax Tax Rates;2010 $(50,000) 35%;2011 (65,000) 30%;2012 (15,000) 30%;2013 60,000 30%;2014 70,000 30%;There are no other temporary differences. InFoltz's December 31, 2010 balance sheet, the noncurrent deferred income tax liability and the income taxes currently payable should be;Noncurrent Deferred Income Taxes;Income Tax Liability Currently Payable;a. $39,000 $50,000;b. $39,000 $70,000;c. $15,000 $60,000;d. $15,000 $70,000;100. Didde Corp. prepared the following reconciliation of income per books with income per tax return for the year ended December 31, 2011;Book income before income taxes $1,200,000;Add temporary difference;Construction contract revenue which will reverse in 2012 160,000;Deduct temporary difference;Depreciation expense which will reverse in equal amounts in;each of the next four years (640,000);Taxable income $720,000;Didde's effective income tax rate is 34% for 2011. What amount should Didde report in its 2011 income statement as the current provision for income taxes?;a. $54,400;b. $244,800;c. $408,000;d. $462,400;101. In its 2010 income statement, Cohen Corp. reported depreciation of $1,110,000 and interest revenue on municipal obligations of $210,000. Cohen reported depreciation of $1,650,000 on its 2010 income tax return. The difference in depreciation is the only temporary difference, and it will reverse equally over the next three years. Cohen's enacted income tax rates are 35% for 2010, 30% for 2011, and 25% for 2012 and 2013. What amount should be included in the deferred income tax liability in Hertz's December 31, 2010 balance sheet?;a. $144,000;b. $186,000;c. $225,000;d. $262,500;102. Dunn, Inc. uses the accrual method of accounting for financial reporting purposes and appropriately uses the installment method of accounting for income tax purposes. Installment income of $900,000 will be collected in the following years when the enacted tax rates are;Collection of Income Enacted Tax Rates;2010 $ 90,000 35%;2011 180,000 30%;2012 270,000 30%;2013 360,000 25%;The installment income is Dunn's only temporary difference. What amount should be included in the deferred income tax liability in Dunn's December 31, 2010 balance sheet?;a. $225,000;b. $256,500;c. $283,500;d. $315,000;103. For calendar year 2010, Kane Corp. reported depreciation of $1,200,000 in its income statement. On its 2010 income tax return, Kane reported depreciation of $1,800,000. Kane's income statement also included $225,000 accrued warranty expense that will be deducted for tax purposes when paid. Kane's enacted tax rates are 30% for 2010 and 2011, and 24% for 2012 and 2013. The depreciation difference and warranty expense will reverse over the next three years as follows;Depreciation Difference Warranty Expense;2011 $240,000 $ 45,000;2012 210,000 75,000;2013 150,000 105,000;$600,000 $225,000;These were Kane's only temporary differences. In Kane's 2010 income statement, the deferred portion of its provision for income taxes should be;a. $200,700.;b. $112,500.;c. $101,700.;d. $109,800.;104. Wright Co., organized on January 2, 2010, had pretax accounting income of $880,000 and taxable income of $1,600,000 for the year ended December 31, 2010 The only temporary difference is accrued product warranty costs which are expected to be paid as follows;2011 $240,000;2012 120,000;2013 120,000;2014 240,000;The enacted income tax rates are 35% for 2010, 30% for 2011 through 2013, and 25% for 2014. If Wright expects taxable income in future years, the deferred tax asset in Wright's December 31, 2010 balance sheet should be;a. $144,000.;b. $168,000.;c. $204,000.;d. $252,000.


Paper#35571 | Written in 18-Jul-2015

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