Q30. 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%. What is the deferred tax liability or asset? A deferred tax:

A)   liability of $10,880.

B)   liability of $16,320.

C)   asset of $10,880.

Q31. Kruger Associates uses an accrual basis for financial reporting purposes and cash basis for tax purposes. Cash collections from customers are $476,000, and accrued revenue is only $376,000. Assume expenses at 50% in both cases (i.e., $238,000 on cash basis and $188,000 on accrual basis), and a tax rate of 34%. What is the deferred tax asset or liability? A deferred tax:

A)   asset of $17,000.

B)   asset of $48,960.

C)   liability of $17,000.

Q32. A firm is purchasing a new file server for $680,000 with a 4-year expected life and a salvage value of $50,000. It is expected that the new server will generate an additional $200,000 in revenue each year. The firm will use the straight line method to depreciate the server for financial reporting, but the sum-of-year’s digits (SYD) method for tax purposes. How much tax will be payable in year two, assuming a 35% tax rate?

A)   -$1,400.

B)   $14,875

C)   $3,850.

Q33. 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%, 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% in years 1 and 2, and 30% in year 3. For purposes of this exercise ignore all expenses other than depreciation.

What is the net income and depreciation expense for year one for financial reporting purposes?

          Net Income                         epreciation Expense

A)    $2,535                                 $3,169

B)    $2,748                                 $2,535

C)    $4,657                                 $2,748

答案和详解如下：

Q30. 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%. What is the deferred tax liability or asset? A deferred tax:

A)   liability of $10,880.

B)   liability of $16,320.

C)   asset of $10,880.

Correct answer is A)

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)]

Q31. Kruger Associates uses an accrual basis for financial reporting purposes and cash basis for tax purposes. Cash collections from customers are $476,000, and accrued revenue is only $376,000. Assume expenses at 50% in both cases (i.e., $238,000 on cash basis and $188,000 on accrual basis), and a tax rate of 34%. What is the deferred tax asset or liability? A deferred tax:

A)   asset of $17,000.

B)   asset of $48,960.

C)   liability of $17,000.

Correct answer is A)

Since taxable income ($238,000) exceeds pretax income ($188,000), Kruger will have a deferred tax asset of $17,000 [($238,000 − $188,000)(0.34)].

Q32. A firm is purchasing a new file server for $680,000 with a 4-year expected life and a salvage value of $50,000. It is expected that the new server will generate an additional $200,000 in revenue each year. The firm will use the straight line method to depreciate the server for financial reporting, but the sum-of-year’s digits (SYD) method for tax purposes. How much tax will be payable in year two, assuming a 35% tax rate?

A)   -$1,400.

B)   $14,875

C)   $3,850.

Correct answer is C)         

Income for each year is expected to be $200,000. The second year’s depreciation will be ($680,000 − $50,000) × 0.3 = $189,000, so the taxable income will be $11,000 and the tax will be $11,000 × 0.35 = $3,850.

Q33. 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%, 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% in years 1 and 2, and 30% in year 3. For purposes of this exercise ignore all expenses other than depreciation.

What is the net income and depreciation expense for year one for financial reporting purposes?

          Net Income                         epreciation Expense

A)    $2,535                                 $3,169

B)    $2,748                                 $2,535

C)    $4,657                                 $2,748

Correct answer is B)

Net income in year 1 for financial reporting purposes will be $2,748 = [($7,192 − $2,535)(1 − 0.41)]

The annual depreciation expense on financial statements will be $2,535 = ($12,676 / 5 years)

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