Q1. Which of the following statements regarding the disclosure of deferred taxes in a company’s balance sheet is most accurate? A) There should be a combined disclosure of all deferred tax assets and liablities. B) Current deferred tax liability, current deferred tax asset, noncurrent deferred tax liability and noncurrent deferred tax asset are each disclosed separately. C) Current deferred tax liability and noncurrent deferred tax asset are netted, resulting in the disclosure of a net noncurrent deferred tax liability or asset.
Q2. A firm purchased a piece of equipment for $6,000 with the following information provided: - Revenue will be $15,000 per year.
- The equipment has a 3-year life expectancy and no salvage value.
- The firm's tax rate is 30%.
- Straight-line depreciation is used for financial reporting and double declining is used for tax purposes.
Calculate taxes payable for years 1 and 2. Year 1 Year 2
A) 600 -200 B) 3,900 3,900 C) 3,300 4,100
Year: | 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 |
Q3. Assume an income tax rate of 40%. The company's income tax expense for 2002 is: A) $60. B) $50. C) $0.
Q4. An analyst gathered the following information about a company: - Pretax income = $10,000.
- Taxes payable = $2,500.
- Deferred taxes = $500.
- Tax expense = $3,000.
What is the firm's reported effective tax rate? A) 25%. B) 30%. C) 5%.
Q5. While evaluating the financial statements of Omega, Inc., the analyst observes that the effective tax rate is 7% less than the statutory rate. The source of this difference is determined to be a tax holiday on a manufacturing plant located in South Africa. This item is most likely to be: A) sporadic in nature, and the analyst should try to identify the termination date and determine if taxes will be payable at that time. B) sporadic in nature, but the effect is typically neutralized by higher home country taxes on the repatriated profits. C) continuous in nature, so the termination date is not relevant.
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发表于 2009-1-19 11:09
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