Finance And Accounting

Question: Which of the following statements is NOT a criticism of the accounting for deferred income taxes?
A
Payment of deferred taxes may be deferred indefinitely.

B
The amount on the Balance Sheet for deferred income taxes is not an obligation.

C
Deferred taxes result in the effective tax rate being different from the statutory tax rate.

D
The amount on the Balance Sheet for deferred income taxes is an undiscounted amount.

Note: Answer not sure
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Question: XYZ Company acquires common stock of the ABC Company for the purpose of developing a long-term relationship with ABC, which is a major supplier of the raw material used to manufacture XYZ's product. How would XYZ Company report these securities on its Balance Sheet?
A
At acquisition cost and classified as a current asset in the Marketable Securities account

B
At acquisition cost and classified as a noncurrent asset in the Investment in Securities account

C
At market value and classified as a current asset in the Marketable Securities account

D
At market value and classified as a noncurrent asset in the Investment in Securities account

Note: Answer not sure
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Question: During Year 1, XYZ Company receives a four-month, 6 percent note in the amount of $28,500. How much interest will XYZ Company earn if it holds the note to maturity?
A
$570

B
$428

C
$0

D
$1,710

Note: Answer not sure
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Question: XYZ Company reports income tax expense of $224,000 on its Income Statement for the year ending December 31 Year 4. Included in Year 4's income is interest revenue of $40,000 from some tax-exempt municipal bonds that the company owns. In computing its income tax expense of $224,000, the company also had a temporary difference of $80,000, which will result in a future tax deduction. It is assumed that a tax rate of 30 percent will apply to the future tax deduction. The tax rate for Year 4 (the company's first year of operations) is 40 percent. Given the above information, what amount would XYZ Company report as current income tax payable on its Year 4 Balance Sheet?
A
$224,000

B
$248,000

C
$208,000

D
None of these

Note: Answer not sure
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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. Given the above information, which of the following statements is true?
A
On its 12/31 Year 1 Balance Sheet, XYZ Company would report the Beatty stock at its cost of $78,000.

B
On its Income Statement for the year ending 12/31 Year 1, XYZ Company would report an unrealized holding gain on the Beatty stock of $15,600.

C
On its 12/31 Tear 1 Balance Sheet, XYZ Company would report an unrealized holding gain on the Beatty stock of $15,600 in a shareholders' equity account

D
On its 12/31 Year 1 Balance Sheet, XYZ Company would report the Beatty stock at its cost of $78,000. and On its Income Statement for the year ending 12/31 Year 1, XYZ Company would report an unrealized holding gain on the Beatty stock of $15,600.

Note: Answer not sure
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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. When the first lease payment is made on December 31 of Year 1, what amount would XYZ Company record for interest expense?
A
$0

B
$7,876

C
$39,380

D
None of these

Note: Answer not sure
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Question: Which of the following statements describing the effects of Investment in Securities on the Cash Flow Statement is NOT true?
A
When a company uses the market value method for securities available for sale, calculating cash flow from operations normally requires no adjustment to net income.

B
In calculating cash flow from operations, Unrealized Holding Loss for securities available for sale is usually added back to Net Income.

C
In calculating cash flow from operations, there is usually a subtraction from Net Income if a company uses the equity method, and if it received dividends less than its share of investee's earnings.

D
All of these statements are true.

Note: Answer not sure
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Question: Which of the following account titles is not associated with the use of the market value method?
A
Unrealized Holding Loss on Investment in Securities

B
Unrealized Holding Gain on Investment in Securities

C
Equity in Earnings of Affiliate

D
Investment in Securities

Note: Answer not sure
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Question: On its December 31 Year 2 Balance Sheet, XYZ Company reports a current liability for income tax payable of $180,000. During the year, the company's Deferred Tax Liability account increased by $54,000 based on a tax rate of 40 percent applying to the future period of taxable income. The tax rate for Year 2 was 30 percent. Given the above information, how did XYZ's book and taxable income relate in Year 2?
A
Book income exceeded taxable income.

B
Taxable income exceeded book income.

C
Book income equaled taxable income.

D
The difference between book income and taxable income is due to a permanent difference.

Note: Answer not sure
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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. What amount would XYZ Company report as the lease liability on its December 31 Year 1 Balance Sheet?
A
$79,200

B
$83,000

C
$100,000

D
$75,800

Note: Answer not sure
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Question: Which of the following statements is NOT a criticism of the accounting for deferred income taxes?

Question: XYZ Company acquires common stock of the ABC Company for the purpose of developing a long-term relationship with ABC, which is a major supplier of the raw material used to manufacture XYZ's product. How would XYZ Company report these securities on its Balance Sheet?

Question: During Year 1, XYZ Company receives a four-month, 6 percent note in the amount of $28,500. How much interest will XYZ Company earn if it holds the note to maturity?

Question: Which of the following statements describing the effects of Investment in Securities on the Cash Flow Statement is NOT true?

Question: Which of the following account titles is not associated with the use of the market value method?