Finance And Accounting

Question: XYZ Company reports book income of $600,000 and income for tax purposes of $570,000. The $30,000 difference is caused by the use of ACRS for tax purposes. Assume that the current tax rate is 35 percent and that a tax rate of 40 percent will apply to the future period of taxable income. What is the amount of taxes currently payable?
A
$210,000

B
$12,000

C
$199,500

D
$211,500

Note: Answer not sure
1. Report
Question: Which of the following is a reason that lessees prefer operating leases?
A
Capital leases result in an increased debt-equity ratio.

B
Capital leases result in earlier recognition of expenses.

C
Operating leases result in the non-recognition of lease assets and lease liabilities.

D
All of these are reasons that lessees prefer operating leases.

Note: Answer not sure
1. Report
Question: When temporary differences that give rise to future tax deductions are multiplied by the enacted income tax rate expected to apply in the future periods of the deduction, the result is _____________.
A
permanent difference

B
liability

C
deferred tax asset

D
deferred tax liability

Note: Answer not sure
1. Report
Question: XYZ Company purchases some debt securities in Year 2 with the intent of selling the securities when XYZ needs the cash for its operations. Given generally accepted accounting principles, which of the following categories would this investment fall under?
A
Debt securities that the company intends to hold to maturity

B
Debt and equity securities held as trading securities

C
Debt and equity securities held as securities available for sale

D
None of these

Note: Answer not sure
1. Report
Question: The MNO Bank actively trades in debt securities with the intent of earning profits from short-term differences in market prices. How should the bank report the debt securities on its Balance Sheet?
A
At acquisition cost

B
At market value

C
At amortized acquisition cost

D
None of these

Note: Answer not sure
1. Report
Question: When temporary differences that will result in future taxable income are multiplied by the enacted income tax rate expected to apply in the future period of the taxable income, the result is _________________.
A
permanent difference

B
temporary difference

C
deferred tax liability

D
tax obligation

Note: Answer not sure
1. Report
Question: On January 1 of Year 1, XYZ Company leases a building and records the leasehold asset and the liability at $210,620, which is the present value of five end-of-year payments of $50,000, each discounted at 6 percent. The asset has a useful life of five years and a zero salvage value. Assuming straight-line amortization, what amount would XYZ Company report on its Balance Sheet as the book value of the leasehold asset as of December 31 of Year 1?
A
$250,000

B
$168,496

C
$210,620

D
$160,620

Note: Answer not sure
1. Report
Question: On January 1 of Year 1, XYZ Company leases equipment under a capital lease that calls for five payments of $25,000 at the end of each year. The first payment is due on December 31 of Year 1. Using 12 percent interest, the present value of the lease liability is $90,000 on January 1 of Year 1. How much of the first payment of $25,000 is interest expense?
A
$10,800

B
$7,000

C
$15,000

D
$10,000

Note: Answer not sure
1. Report
Question: XYZ Company has three securities in its portfolio available for sale, as follows: Security 1: Beatty, Cost: $78,000, 12/31/06 Market Value: $93,600, 12/31/07 Market Value:$100,100 Security 2: Cole, Cost: $117,000, 12/31/06 Market Value: $120,900, 12/31/07 Market Value:$0 Security 3: Sells, Cost: $58,500, 12/31/06 Market Value: $53,500, 12/31/07 Market Value:$50,700 The Cole stock was sold in Year 2 for $127,400. Assume that on 12/31 Year 2, XYZ Company reclassifies the Sells stock to A "trading security" status. Given the above information, what amount would be reported for the Sells stock in XYZ's trading security portfolio?
A
$58,500

B
$53,300

C
$50,700

D
None of these

Note: Answer not sure
1. Report
Question: Which of the following accounts would NOT be eliminated in the preparation of consolidated financial statements?
A
Common Stock - Parent Company

B
Common Stock - Subsidiary Company

C
Investment in Stock of Subsidiary Company (Parent Company)

D
All of these

Note: Answer not sure
1. Report

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Question: Which of the following is a reason that lessees prefer operating leases?

Question: When temporary differences that give rise to future tax deductions are multiplied by the enacted income tax rate expected to apply in the future periods of the deduction, the result is _____________.

Question: XYZ Company purchases some debt securities in Year 2 with the intent of selling the securities when XYZ needs the cash for its operations. Given generally accepted accounting principles, which of the following categories would this investment fall under?

Question: The MNO Bank actively trades in debt securities with the intent of earning profits from short-term differences in market prices. How should the bank report the debt securities on its Balance Sheet?

Question: When temporary differences that will result in future taxable income are multiplied by the enacted income tax rate expected to apply in the future period of the taxable income, the result is _________________.

Question: Which of the following accounts would NOT be eliminated in the preparation of consolidated financial statements?