Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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Question
Chapter 17, Problem 3Q
To determine
Explain the information must the city provide in its financial statements to inform taxpayers and other interested parties about the nature of this tax abatement. Officials for the city of Winfield have agreed to forgo real estate taxes normally charged to J Corporation for the subsequent 10 years. In exchange, J Corporation has agreed to build a distribution facility that is expected to hire 500 new employees.
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Officials for the city of Winfield have agreed to forgo real estate taxes normally charged to Jamieson Corporation for the subsequent 10 years. In exchange, Jamieson has agreed to build a distribution facility that is expected to hire 500 new employees. What information must the city provide in its financial statements to inform taxpayers and other interested parties about the nature of this tax abatement?
Superior Developers sells lots for residential development. When lots are sold, Superior recognizes income for financial reporting purposes in the year of the sale. For some lots, Superior recognizes income for tax purposes when the cash is collected. In 2020, Superior sold lots for $20 for which no cash was collected at the time of the sale. This cash will be collected equally over 2021 and 2022. The enacted tax rate was 40% at the time of the sale. In 2021, a new tax law was enacted, revising the tax rate from 40% to 25% beginning in 2022. Calculate the total amount by which Superior should change its deferred tax liability in 2021.
The following transactions relate to Newport City's special revenue fund.
1. In 2024, Newport City created a special revenue fund to help fund the 911 emergency call center. The center is to be funded
through a legally restricted tax on cellular phones. No budget is recorded.
2. During the first year of operations, revenues from the newly imposed tax totaled $527,500. Of this amount, $474,750 has been
received in cash and the remainder will be received within 60 days of the end of the fiscal year.
3. Expenditures (salaries) incurred through the operation of the 911 emergency call center totaled $467,000. Of this amount, $436,645
was paid before year-end.
4. During the year the state government awarded Newport City a grant to reimburse the City's costs (not to exceed $178,500) for the
purpose of training new 911 operators. During the year, the City paid $169,575 (not reflected in the expenditures above) to train new
operators for the 911 emergency call center and billed the state…
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