Jennings Co. has earnings after interest but before taxes of $3,000. The Company's times interest earned ratio is 7.00. Calculate the company's interest charges.
Click here for the solution: Jennings Co. has earnings after interest but before taxes of $3,000
Showing posts with label taxes. Show all posts
Showing posts with label taxes. Show all posts
Sunday, September 27, 2015
Sunday, September 20, 2015
According to the accountant of Ulner Inc., its payroll taxes for the week were as follows
ACC 291 Week 3 Assignment
E10-6 According to the accountant of Ulner Inc., its payroll taxes for the week were as follows: $198.40 for FICA taxes, $19.84 for federal unemployment taxes, and $133.92 for state unemployment taxes.
Instructions
Journalize the entry to record the accrual of the payroll taxes.
Click here for the solution: According to the accountant of Ulner Inc., its payroll taxes for the week were as follows
E10-6 According to the accountant of Ulner Inc., its payroll taxes for the week were as follows: $198.40 for FICA taxes, $19.84 for federal unemployment taxes, and $133.92 for state unemployment taxes.
Instructions
Journalize the entry to record the accrual of the payroll taxes.
Click here for the solution: According to the accountant of Ulner Inc., its payroll taxes for the week were as follows
Sunday, September 13, 2015
P4-3 For the year ending December 31, 2011, Micron Corporation had income from continuing operations before taxes
P4-3 Income statement presentation
For the year ending December 31, 2011, Micron Corporation had income from continuing operations before taxes of $1,200,000 before considering the following transactions and events. All of the items described below are before taxes and the amounts should be considered material.
1. During 2011, one of Micron's factories was damaged in an earthquake. As a result, the firm recognized a loss of $800,000. The event is considered unusual and infrequent.
2. In November of 2011, Micron sold its Waffle House restaurant chain that qualified as a component of an entity. The company had adopted a plan to sell the chain in May of 2011. The operating income of the chain from January 1, 2011, through November was $160,000 and the loss on sale of the chain's assets was $300,000.
3. In 2011, Micron sold one of its six factories for $1,200,000. At the time of the sale, the factory had a carrying value of $1,100,000. The factory was not considered a component of the entity.
4. In 2009, Micron's accountant omitted the annual adjustment for patent amortization expense of $120,000. The error was not discovered until December 2011.
Required:
1. Prepare Micron's income statement, beginning with income from continuing operations before taxes, for the year ended December 31, 2011. Assume an income tax rate of 30%. Ignore EPS disclosures.
2. Briefly explain the motivation for segregating certain income statement events from income from continuing operations.
Click here for the solution: P4-3 For the year ending December 31, 2011, Micron Corporation had income from continuing operations before taxes
For the year ending December 31, 2011, Micron Corporation had income from continuing operations before taxes of $1,200,000 before considering the following transactions and events. All of the items described below are before taxes and the amounts should be considered material.
1. During 2011, one of Micron's factories was damaged in an earthquake. As a result, the firm recognized a loss of $800,000. The event is considered unusual and infrequent.
2. In November of 2011, Micron sold its Waffle House restaurant chain that qualified as a component of an entity. The company had adopted a plan to sell the chain in May of 2011. The operating income of the chain from January 1, 2011, through November was $160,000 and the loss on sale of the chain's assets was $300,000.
3. In 2011, Micron sold one of its six factories for $1,200,000. At the time of the sale, the factory had a carrying value of $1,100,000. The factory was not considered a component of the entity.
4. In 2009, Micron's accountant omitted the annual adjustment for patent amortization expense of $120,000. The error was not discovered until December 2011.
Required:
1. Prepare Micron's income statement, beginning with income from continuing operations before taxes, for the year ended December 31, 2011. Assume an income tax rate of 30%. Ignore EPS disclosures.
2. Briefly explain the motivation for segregating certain income statement events from income from continuing operations.
Click here for the solution: P4-3 For the year ending December 31, 2011, Micron Corporation had income from continuing operations before taxes
Sunday, September 6, 2015
What advantages does a cash method taxpayer gain by electing to accrue foreign taxes for foreign tax credit purposes?
C:16-8 What advantages does a cash method taxpayer gain by electing to accrue foreign taxes for foreign tax credit purposes?
Click here for the solution: What advantages does a cash method taxpayer gain by electing to accrue foreign taxes for foreign tax credit purposes?
Click here for the solution: What advantages does a cash method taxpayer gain by electing to accrue foreign taxes for foreign tax credit purposes?
Friday, August 21, 2015
Button Company has two temporary differences between its income tax expense and income taxes payable
E19-8 (Two Temporary Differences, One Rate, 3 years) Button Company has two temporary differences between its income tax expense and income taxes payable. The information is shown on page 1004.
2007 2008 2009
Personal Financial income $840,000 $910,000 $945,000
Excess depreciation expense on tax return (30,000) (40,000) (10,000)
Excess warranty expense in financial income 20,000 10,000 8,000
Taxable Income 830,000 880,000 943,000
Income tax rate for all years = 40%
Prepare the income tax expense sectin of the income statement for 2009, beginning with the line "Pretax financial income."
Click here for the solution: Button Company has two temporary differences between its income tax expense and income taxes payable
2007 2008 2009
Personal Financial income $840,000 $910,000 $945,000
Excess depreciation expense on tax return (30,000) (40,000) (10,000)
Excess warranty expense in financial income 20,000 10,000 8,000
Taxable Income 830,000 880,000 943,000
Income tax rate for all years = 40%
Prepare the income tax expense sectin of the income statement for 2009, beginning with the line "Pretax financial income."
Click here for the solution: Button Company has two temporary differences between its income tax expense and income taxes payable
CA19-1 (Objectives and Principles for Accounting for Income Taxes)
CA19-1 (Objectives and Principles for Accounting for Income Taxes) The amount of income taxes due to the government for a period of time is rarely the amount reported on the income statement for that period as income tax expense.
Instructions
(a) Explain the objectives of accounting for income taxes in general purpose financial statements.
(b) Explain the basic principles that are applied in accounting for income taxes at the date of the financial statements to meet the objectives discussed in (a).
(c) List the steps in the annual computation of deferred tax liabilities and assets.
Click here for the solution: CA19-1 (Objectives and Principles for Accounting for Income Taxes)
Instructions
(a) Explain the objectives of accounting for income taxes in general purpose financial statements.
(b) Explain the basic principles that are applied in accounting for income taxes at the date of the financial statements to meet the objectives discussed in (a).
(c) List the steps in the annual computation of deferred tax liabilities and assets.
Click here for the solution: CA19-1 (Objectives and Principles for Accounting for Income Taxes)
Saturday, August 1, 2015
Maher Inc. reported income from continuing operations before taxes during 2010 of $790,000
P4-3 (Irregular Items) Maher Inc. reported income from continuing operations before taxes during 2010 of $790,000. Additional transactions occurring in 2010 but not considered in the $790,000 are as follows.
1. The corporation experienced an uninsured flood loss (extraordinary) in the amount of $90,000 during the year. The tax rate on this item is 46%.
2. At the beginning of 2008, the corporation purchased a machine for $54,000 (salvage value of $9,000) that had a useful life of 6 years. The bookkeeper used straight-line depreciation for 2008, 2009, and 2010 but failed to deduct the salvage value in computing the depreciation base.
3. Sale of securities held as a part of its portfolio resulted in a loss of $57,000 (pretax).
4. When its president died, the corporation realized $150,000 from an insurance policy. The cash surrender value of this policy had been carried on the books as an investment in the amount of $46,000 (the gain is nontaxable).
5. The corporation disposed of its recreational division at a loss of $115,000 before taxes. Assume that this transaction meets the criteria for discontinued operations.
6. The corporation decided to change its method of inventory pricing from average cost to the FIFO method. The effect of this change on prior years is to increase 2008 income by $60,000 and decrease 2009 income by $20,000 before taxes. The FIFO method has been used for 2010. The tax rate on these items is 40%.
Instructions
Prepare an income statement for the year 2010 starting with income from continuing operations before taxes.
Compute earnings per share as it should be shown on the face of the income statement. Common shares outstanding for the year are 120,000 shares. (Assume a tax rate of 30% on all items, unless indicated otherwise.)
Click here for the solution: Maher Inc. reported income from continuing operations before taxes during 2010 of $790,000
1. The corporation experienced an uninsured flood loss (extraordinary) in the amount of $90,000 during the year. The tax rate on this item is 46%.
2. At the beginning of 2008, the corporation purchased a machine for $54,000 (salvage value of $9,000) that had a useful life of 6 years. The bookkeeper used straight-line depreciation for 2008, 2009, and 2010 but failed to deduct the salvage value in computing the depreciation base.
3. Sale of securities held as a part of its portfolio resulted in a loss of $57,000 (pretax).
4. When its president died, the corporation realized $150,000 from an insurance policy. The cash surrender value of this policy had been carried on the books as an investment in the amount of $46,000 (the gain is nontaxable).
5. The corporation disposed of its recreational division at a loss of $115,000 before taxes. Assume that this transaction meets the criteria for discontinued operations.
6. The corporation decided to change its method of inventory pricing from average cost to the FIFO method. The effect of this change on prior years is to increase 2008 income by $60,000 and decrease 2009 income by $20,000 before taxes. The FIFO method has been used for 2010. The tax rate on these items is 40%.
Instructions
Prepare an income statement for the year 2010 starting with income from continuing operations before taxes.
Compute earnings per share as it should be shown on the face of the income statement. Common shares outstanding for the year are 120,000 shares. (Assume a tax rate of 30% on all items, unless indicated otherwise.)
Click here for the solution: Maher Inc. reported income from continuing operations before taxes during 2010 of $790,000
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