At the beginning of 2012, Annie, Inc. has a deferred tax asset of $7,500 and deferred tax liability of $10,500. In 2012, pretax financial income was $826,000 and the tax rate was 35%. Pretax income included: Interest income from municipal bonds $15,000 Accrued warranty costs, estimated to be used in 2013 $74,000 Prepaid rent expense, will be used in 2013 $31,000 Instalment sales revenue, to be collected in 2013 $56,000 Operating loss carry forward $71,000 What is the adjustment needed to correct the balance of deferred tax assets for 2012? A. $25,900 DR. B. $30,450 CR. C. $30,450 DR. D. $18,400 DR. Ross corporation, a calendar year taxpayer, had a taxable income of $90,000, which included a net capital gain of $10,000. What is Ross Corp's income tax? During 2011 Doubleday Company converted $1,700,000 of its total $2,000,000 of bonds payable into common stock. a. Indicate how the transaction would be reported on a statement of cash flows, if at all. b. Why is it advantageous to use a worksheet when preparing a statement of cash flows? c. Is a worksheet required to prepare a statement of cash flows?

At the beginning of 2012, Annie, Inc. has a deferred tax asset of $7,500 and deferred tax liability of $10,500. In 2012, pretax financial income was $826,000 and the tax rate was 35%. Pretax income included: Interest income from municipal bonds $15,000 Accrued warranty costs, estimated to be used in 2013 $74,000 Prepaid rent expense, will be used in 2013 $31,000 Instalment sales revenue, to be collected in 2013 $56,000 Operating loss carry forward $71,000 What is the adjustment needed to correct the balance of deferred tax assets for 2012? A. $25,900 DR. B. $30,450 CR. C. $30,450 DR. D. $18,400 DR. Ross corporation, a calendar year taxpayer, had a taxable income of $90,000, which included a net capital gain of $10,000. What is Ross Corp's income tax? During 2011 Doubleday Company converted $1,700,000 of its total $2,000,000 of bonds payable into common stock. a. Indicate how the transaction would be reported on a statement of cash flows, if at all. b. Why is it advantageous to use a worksheet when preparing a statement of cash flows? c. Is a worksheet required to prepare a statement of cash flows?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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