ACC 423 Week 5 Final Exam (part -2) | Assignment Help | University Of Phoenix

ACC 423 Week 5 Final Exam | Assignment Help | University Of Phoenix 

Brief Exercise 17-9


 

 

The following information relates to Sarasota Co. for the year ended December 31, 2017: net income 1,285 million; unrealized holding loss of $9.9 million related to available-for-sale debt securities during the year; accumulated other comprehensive income of $56.1 million on December 31, 2016. Assuming no other changes in accumulated other comprehensive income.

Determine (a) other comprehensive income for 2017, (b) comprehensive income for 2017, and (c) accumulated other comprehensive income at December 31, 2017. (Enter answers in millions to 1 decimal place, e.g. 25.5. Enter loss using either a negative sign preceding the number e.g. -45.2 or parentheses e.g. (45.2).)

Brief Exercise 17-13


 

 

Presented below are two independent cases related to available-for-sale debt investments.

Case 1

Case 2

Amortized cost

$40,210

$101,600

Fair value

29,720

111,610

Expected credit losses

24,420

92,910


For each case, determine the amount of impairment loss, if any. (If no loss, please enter 0. Do not leave any fields blank.)

 

 

Exercise 17-3

On January 1, 2017, Sheffield Company purchased 8% bonds having a maturity value of $320,000, for $346,959.62. The bonds provide the bondholders with a 6% yield. They are dated January 1, 2017, and mature January 1, 2022, with interest receivable January 1 of each year. Sheffield Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category


 

Exercise 17-10

At December 31, 2017, the available-for-sale debt portfolio for Pharoah, Inc. is as follows.

Security

Cost

Fair Value

Unrealized
Gain (Loss)

A

$62,125

$53,250

$(8,875

)

B

44,375

49,700

5,325

C

81,650

90,525

8,875

 

Total

$188,150

$193,475

5,325

Previous fair value adjustment balance—Dr.

1,420

 

Fair value adjustment—Dr.

$3,905

 


On January 20, 2018, Pharoah, Inc. sold security A for $53,605. The sale proceeds are net of brokerage fees.

PharoahInc. reports net income in 2017 of $426,000 and in 2018 of $497,000. Total holding gains (including any realized holding gain or loss) equal $142,000 in 2018.


Exercise 17-10

At December 31, 2017, the available-for-sale debt portfolio for Pharoah, Inc. is as follows.

Security

Cost

Fair Value

Unrealized
Gain (Loss)

A

$62,125

$53,250

$(8,875

)

B

44,375

49,700

5,325

C

81,650

90,525

8,875

 

Total

$188,150

$193,475

5,325

Previous fair value adjustment balance—Dr.

1,420

 

Fair value adjustment—Dr.

$3,905

 


On January 20, 2018, Pharoah, Inc. sold security A for $53,605. The sale proceeds are net of brokerage fees.

PharoahInc. reports net income in 2017 of $426,000 and in 2018 of $497,000. Total holding gains (including any realized holding gain or loss) equal $142,000 in 2018.



                     

Brief Exercise 19-3

 


 

 
Headland Corporation began operations in 2017 and reported pretax financial income of $234,000 for the year. Headland’s tax depreciation exceeded its book depreciation by $33,000. Headland’s tax rate for 2017 and years thereafter is 40%. Assume this is the only difference between Headland’s pretax financial income and taxable income.




Prepare the journal entry to record the income tax expense, deferred income taxes, and income taxes payable. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)


Exercise 19-2


The following information is available for Flint Corporation for 2016 (its first year of operations).

1.

Excess of tax depreciation over book depreciation, $40,800. This $40,800 difference will reverse equally over the years 2017–2020.

2.

Deferral, for book purposes, of $18,200 of rent received in advance. The rent will be recognized in 2017.

3.

Pretax financial income, $298,300.

4.

Tax rate for all years, 30%.


 

CPA Question 08



The net operating loss (NOL) carry-forward of $40,000 is negative taxable income from the past that can be used to absorb future taxable income. With no temporary or permanent differences, we can assume taxable income and pre-tax accounting income are the same. The full amount of the NOL can be used to absorb $40,000 of 2017 income, saving $12,000 of tax ($40,000 x .30). The firm will pay only $6,000 in tax for the 2017 tax year ($60,000 - $40,000) x .30. The savings of $12,000 are the realization of the tax benefit recognized in previous years, when the firm recorded a deferred tax asset for the future tax benefit of the NOL.

 

 

Brass Co. reported income before income tax expense of $60,000 for 2017. Brass had no permanent or temporary timing differences for tax purposes. Brass has an effective tax rate of 30% and a $40,000 net operating loss carry-forward from 2016. What is the maximum income tax benefit that Brass can realize from the loss carry-forward for 2017? 


 




 



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