Q25. A dance club purchased new sound equipment for $25,352. It will work for 5 years and has no salvage value. Their tax rate is 41%, and their annual revenues are constant at $14,384. For financial reporting, the straight-line depreciation method is used, but for tax purposes depreciation is accelerated to 35% in years 1 and 2 and 30% in Year 3. For purposes of this exercise ignore all expenses other than depreciation. Assume that the tax rate changes for years 4 and 5 from 41% to 31%. What will be the deferred tax liability as of the end of year three? A) $1,039. B) $3,144. C) $2,948.
Q26. Because the tax rate changes for years 4 and 5 from 41% to 31%, net income will have to be adjusted for financial reporting purposes in year three. What is the amount of this adjustment? A) $1,014. B) $1,030. C) $747.
Year ending 31 December: | 2002 | 2003 | 2004 | Income Statement: |
| Revenues after all expenses other than depreciation | $200 | $300 | $400 |
| Depreciation expense | 50 | 50 | 50 |
| Income before income taxes | $150 | $250 | $350 |
| Tax return: |
| Taxable income before depreciation expense | $200 | $300 | $400 |
| Depreciation expense | 75 | 50 | 25 |
| Taxable income | $125 | $250 | $375 |
Q27. Assume an income tax rate of 40% and zero deferred tax liability on 31 December 2001. The deferred tax liability to be shown in the 31 December 2003, balance sheet and the 31 December 2004 balance sheet, is: 2003 2004
A) $10 $0 B) $0 $10 C) $25 $20
Q28. Camphor Associates uses accrual basis for financial reporting purposes and cash basis for tax purposes. Cash collections from customers is $238,000, and accrued revenue is only $188,000. Assume expenses at 50% in both cases (i.e., $119,000 on cash basis and $94,000 on accrual basis), and a tax rate of 34%. What is the deferred tax asset/liability in this case? A deferred tax: A) asset of $8,500. B) asset of $48,960. C) liability of $8,500.
Q29. This year, Blue Horizon has recorded $390,000 in revenue for financial reporting purposes, but, on a cash basis, revenue was only $262,000. Assume expenses at 50% in both cases (i.e., $195,000 on accrual basis and $131,000 on cash basis), and a tax rate of 34%. What is the deferred tax liability or asset? A deferred tax: A) liability of $16,320. B) liability of $21,760. C) asset of $21,760.
| 
发表于 2009-1-19 10:52
| 
