16.Unit Technologies uses accrual basis for financial reporting purposes and cash accounting for tax purposes. So far this year, Unit Technologies has recorded $195,000 in revenue for financial reporting purposes, but, on a cash basis, revenue was only $131,000. Assume expenses at 50 percent in both cases (i.e., $ 97,500 on accrual basis and $ 65,500 on cash basis), and a tax rate of 34 percent. What is the deferred tax liability or asset? A deferred tax:

A)   asset of $10,880.

B)   asset of $16,320.

C)   liability of $16,320.

D)   liability of $10,880.

17.A firm purchased a piece of equipment for $6,000 with the following information provided:

§ Revenue will increase by $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 balance is used for tax purposes.

Calculate the incremental income tax expense for financial reporting for years 1 and 2.

A)                       $3,900                                $3,900

B)                       $4,500                                $4,500

C)                        $600                                   -$200

D)                        $3,300                               $4,100

18.A firm purchased a piece of equipment for $6,000 with the following information provided:

§ Revenue will increase by $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.

What will the firm report for deferred taxes on the balance sheet for years 1 and 2?

A)                       $600                                     $400

B)                        $3,900                                $3,900

C)                        $4,500                                $4,500

D)                        $3,300                                $4,100

19.An analyst gathered the following information about a company:

§ Taxable income = $100,000

§ Pretax income = $120,000

§ Current tax rate = 20 %

§ Tax rate when the reversal occurs will be 10 %

What is the company's tax expense?

A)   $22,000.

B)   $24,000.

C)   $10,000.

D)   $12,000.

20.A company purchased a new pizza oven directly from Italy for $12,676. It will work for 5 years and has no salvage value. The tax rate is 41 percent, and annual revenues are constant at $7,192. For financial reporting, the straight-line depreciation method is used, but for tax purposes depreciation is accelerated to 35 percent in years 1 and 2, and 30.00 percent in year 3. For purposes of this exercise ignore all expenses other than depreciation.

What is the tax payable for year one?

A)   $1,130.

B)   $1,909.

C)   $779.

D)   $1,626.

答案和详解如下：

16.Unit Technologies uses accrual basis for financial reporting purposes and cash accounting for tax purposes. So far this year, Unit Technologies has recorded $195,000 in revenue for financial reporting purposes, but, on a cash basis, revenue was only $131,000. Assume expenses at 50 percent in both cases (i.e., $ 97,500 on accrual basis and $ 65,500 on cash basis), and a tax rate of 34 percent. What is the deferred tax liability or asset? A deferred tax:

A)   asset of $10,880.

B)   asset of $16,320.

C)   liability of $16,320.

D)   liability of $10,880.

The correct answer was D)

Since pretax income ($97,500) exceeds the taxable income ($65,500), United Technologies will have a deferred tax liability of $10,880 = [( $97,500 - $65,500)(0.34)]

17.A firm purchased a piece of equipment for $6,000 with the following information provided:

§ Revenue will increase by $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 balance is used for tax purposes.

Calculate the incremental income tax expense for financial reporting for years 1 and 2.

Year 1

Year 2

A)                                        $3,900   $3,900

B)                                        $4,500   $4,500

C)                                        $600      -$200

D)                                        $3,300   $4,100

The correct answer was A)

Using SL:

	Yr. 1	Yr. 2
Revenue	15,000	15,000
Dep.	2,000	2,000
Pretax income	13,000	13,000
Tax Expense	3,900	3,900

18.A firm purchased a piece of equipment for $6,000 with the following information provided:

§ Revenue will increase by $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.

What will the firm report for deferred taxes on the balance sheet for years 1 and 2?

Year 1

Year 2

A)                                        $600      $400

B)                                        $3,900   $3,900

C)                                        $4,500   $4,500

D)                                        $3,300   $4,100

The correct answer was A)

Using DDB:

	Yr. 1	Yr. 2
Revenue	15,000	15,000
Dep.	4,000	1,333
Taxable Inc	11,000	13,667
Taxes Pay	3,300	4,100

Using SL:

	Yr. 1	Yr. 2
Revenue	15,000	15,000
Dep.	2,000	2,000
Pretax Inc	13,000	13,000
Tax Exp	3,900	3,900

Deferred taxes year 1 = 3,900 – 3,300 = 600

Deferred taxes year 2 = 3,900 – 4,100 + previously deferred taxes = -200 + 600 = 400

19.An analyst gathered the following information about a company:

§ Taxable income = $100,000

§ Pretax income = $120,000

§ Current tax rate = 20 %

§ Tax rate when the reversal occurs will be 10 %

What is the company's tax expense?

A)   $22,000.

B)   $24,000.

C)   $10,000.

D)   $12,000.

The correct answer was A)

Deferred tax liability = (120,000-100,000) * 0.1 = 2,000

Tax expense = current tax rate * taxable income + deferred tax liability

0.2 * 100,000 + 2,000 = 22,000

20.A company purchased a new pizza oven directly from Italy for $12,676. It will work for 5 years and has no salvage value. The tax rate is 41 percent, and annual revenues are constant at $7,192. For financial reporting, the straight-line depreciation method is used, but for tax purposes depreciation is accelerated to 35 percent in years 1 and 2, and 30.00 percent in year 3. For purposes of this exercise ignore all expenses other than depreciation.

What is the tax payable for year one?

A)   $1,130.

B)   $1,909.

C)   $779.

D)   $1,626.

The correct answer was A)

Tax payable for year 1 will be $1,130 = [{$7,192 - ($12,676 x 0.35)} x 0.41]