Question 1

Types of subsequent events Identify the difference between the two types of subsequent events.

Accepted Answer

The answer of Types of subsequent events Identify the difference...

Question 2

Approaches to accounting for pension expense Discuss the difference between the immediate recognition approach and the deferral and amortization approach when accounting for annual pension expense.

Accepted Answer

The answer of Approaches to accounting for pension expense Discuss...

Question 3

Pension asset terminology Discuss the following ideas related to pension assets:
a.Actual return on plan assets.
b.Expected return on plan assets.
c.Unexpected gains and losses on plan assets.

Accepted Answer

The answer of Pension asset terminology Discuss the following ideas...

Question 4

Taxable loss carryforward without valuation allowance (IFRS) In 2014, its first year of operations, Hampshire Inc.reported a $500,000 loss for tax purposes. However, in 2015, Hampshire reported $200,000 taxable income.The tax rate is 30%, and is likely to remain at this rate for the foreseeable future.Hampshire reports under IFRS. Assume that, at the end of 2014, because it is a new company, Hampshire's management thought that it was probable that the loss carryforward would not be realized in the near future. However, by the end of 2015, management feels it is now probable that there will be future taxable incomes against which the 2014 loss could be applied. Instructions
a.What entries (if any)would be prepared in 2014 to record the loss carryforward?
b.What entries (if any)would be prepared in 2015 to record current and deferred taxes and to
recognize the loss carryforward?

Accepted Answer

The answer of Taxable loss carryforward without valuation allowance (IFRS)...

Question 5

Future income taxes Nevada Corp., at the end of 2014, its first year of operations, prepared a reconciliation between pre-tax accounting income and taxable income as follows:  Estimated warranty expenses of $530,000 will be deductible in 2015, $200,000 in 2016, and $70,000 in 2017.The use of the depreciable assets will result in taxable amounts of $200,000 in each of the next three years. The enacted tax rate is 30% and is not expected to change. Instructions 
a.Prepare a schedule of the future taxable and deductible amounts.
b.Prepare the required adjusting journal entries to record income taxes for 2014.

Accepted Answer

The answer of Future income taxes Nevada Corp., at the...

Question 6

Interim reports A few years ago, a publishing company reported a quarterly net profit figure that exceeded sales for that quarter.Such a situation suggests there are some difficult accounting issues involved in interim reporting. Instructions
a.What are the major accounting problems related to interim reports?
b.What problem exists with income taxes in interim reports and how does IFRS recommend
that income taxes should be reported?
c.Many academicians have attempted to predict the year's net income after the first quarter's
income is reported.These attempts are generally unsuccessful, no matter how sophisticated
the prediction model.What might be the reason for this inability to predict?

Accepted Answer

The answer of Interim reports A few years ago, a...

Question 7

Pension plan calculations and journal entries On January 1, 2014, Prune Ltd.reported the following balances relating to their defined benefit pension plan:  Instructions 
a.Calculate the defined benefit obligation at December 31, 2014.
b.Calculate the fair value of plan assets at December 31, 2014.
c.Calculate pension expense for 2014.
d.Prepare the journal entries to record the pension expense and the contributions for 2014.

Accepted Answer

The answer of Pension plan calculations and journal entries On...

Question 8

Segmented reporting (IFRS requirements) A central issue in reporting on operating segments of a business enterprise is the determination of which segments are reportable under IFRS. Instructions
a.According to IFRS, what are the tests to determine whether or not an operating segment is
reportable?
b.What is the test to determine if enough operating segments have been separately reported
upon, and what is the guideline on the maximum number of operating segments to be
shown?

Accepted Answer

The answer of Segmented reporting (IFRS requirements) A central issue...

Question 9

Income taxes at interim dates Discuss how income taxes are handled at interim dates.

Accepted Answer

The answer of Income taxes at interim dates Discuss how...

Question 10

Stock dividends and stock splits Indicate the principal effects of a stock dividend versus a stock split as they affect the issuing corporation.Respond in the spaces as follows: "C" for change; "NC" for no change.  Shareholders' Equity 15- 45

Accepted Answer

The answer of Stock dividends and stock splits Indicate the...

Question 11

Interim reporting There is ongoing discussion as to the proper method of reflecting results of operations at interim dates.Accordingly, IFRS has made recommendations regarding interim financial reporting. Instructions
a.Discuss generally how revenue should be recognized at interim dates and specifically how
Other Measurement and Disclosure Issues 23- 23
revenue should be recognized for industries subject to large seasonal fluctuations in revenue
and for long-term contracts using the percentage-of-completion method.
b.Discuss generally how product and period costs should be recognized at interim dates.Also
discuss how inventory values should be treated at interim dates.
c.Discuss how the provision for income taxes is calculated and reported in interim financial
statements.

Accepted Answer

The answer of Interim reporting There is ongoing discussion as...

Question 12

Segmented reporting Tangerine Corporation's most recent (condensed)income statement is presented below:  Instructions (Assume that the corporation adheres to IFRS) 
a.Prepare a schedule showing the amounts distributed to each segment.
b.Based only on the above information, which segments must be reported and why?

Accepted Answer

The answer of Segmented reporting Tangerine Corporation's most recent (condensed)income...

Question 13

Taxable temporary difference Explain what a taxable temporary difference is and why a deferred tax liability is recognized.

Accepted Answer

The answer of Taxable temporary difference Explain what a taxable...

Question 14

Taxable loss carryforward with valuation allowance (ASPE) In 2014, its first year of operations, Jersey Inc.reported a $200,000 loss for tax purposes. However, in 2015, Jersey reported $250,000 taxable income.The tax rate is 20%, and is likely to remain at this rate for the foreseeable future.Jersey is a private corporation reporting under ASPE. Assume Jersey's management thinks, at the end of 2014, that it is likely that the loss carryforward will not be realized in the near future.Jersey chooses to use the valuation allowance method for loss carryforwards. Instructions
a.What entries (if any)would be prepared in 2014 to record the loss carryforward?
b.What entries (if any)would be prepared in 2015 to record the current and future income
taxes and to recognize the loss carryforward?

Accepted Answer

The answer of Taxable loss carryforward with valuation allowance (ASPE)...

Question 15

Pension accounting terminology Briefly explain the following terms:
a.Service cost
b.Interest cost
c.Past service costs
d.Vested benefits

Accepted Answer

The answer of Pension accounting terminology Briefly explain the following...

Question 16

Deferred tax asset
a.Describe a deferred tax asset.
b.Under IFRS, when should a deferred tax asset be recognized?

Accepted Answer

The answer of Deferred tax asset
a.Describe a deferred tax asset.
b.Under...

Question 17

Internet financial reporting Other Measurement and Disclosure Issues 23- 21 Discuss some of the issues involved with corporations reporting their results on the internet rather than in paper based formats.

Accepted Answer

The answer of Internet financial reporting Other Measurement and Disclosure...

Question 18

Taxable income and accounting income Explain the difference between accounting income and taxable income.

Accepted Answer

The answer of Taxable income and accounting income Explain the...

Question 19

Pension plan calculations The following information relates to the defined benefit pension plan for Strawberry Dale Ltd.:  In 2014, the corporation contributed $390,000 to the plan, and the trustee paid $210,000 in benefits to retirees.Strawberry Dale uses the immediate recognition approach under IFRS. Instructions For the year ended December 31, 2014: 
a.Calculate the interest on the obligation.
b.Calculate the actual return on plan assets.
c.Calculate the unexpected gain or loss (if any).

Accepted Answer

The answer of Pension plan calculations The following information relates...

Question 20

Deferred income taxes Nebraska Ltd., at the end of 2014, its first year of operations, prepared a reconciliation between pre-tax accounting income and taxable income as follows:  Use of the depreciable assets will result in taxable amounts of $200,000 in each of the next Income Taxes 18- 29 three years.The estimated expenses of $500,000 will be deductible in 2017 when settlement is expected to be made. The enacted tax rate is 25% and is not expected to change. Instructions 
a.Prepare a schedule of the deferred taxable and deductible amounts.
b.Prepare the required adjusting journal entries to record income taxes for 2014.

Accepted Answer

The answer of Deferred income taxes Nebraska Ltd., at the...

Quiz 2: Intermediate Accounting Volume 2

Types of subsequent events Identify the difference between the two types of subsequent events.

Approaches to accounting for pension expense Discuss the difference between the immediate recognition approach and the deferral and amortization approach when accounting for annual pension expense.

Pension asset terminology Discuss the following ideas related to pension assets: a.Actual return on plan assets. b.Expected return on plan assets. c.Unexpected gains and losses on plan assets.

Income taxes at interim dates Discuss how income taxes are handled at interim dates.

Stock dividends and stock splits Indicate the principal effects of a stock dividend versus a stock split as they affect the issuing corporation.Respond in the spaces as follows: "C" for change; "NC" for no change. Shareholders' Equity 15- 45

Taxable temporary difference Explain what a taxable temporary difference is and why a deferred tax liability is recognized.

Pension accounting terminology Briefly explain the following terms: a.Service cost b.Interest cost c.Past service costs d.Vested benefits

Deferred tax asset a.Describe a deferred tax asset. b.Under IFRS, when should a deferred tax asset be recognized?

Internet financial reporting Other Measurement and Disclosure Issues 23- 21 Discuss some of the issues involved with corporations reporting their results on the internet rather than in paper based formats.

Taxable income and accounting income Explain the difference between accounting income and taxable income.