Question 1

How can a company use CCA to fully utilize losses that have been incurred?

Accepted Answer

CCA is an optional deduction.Tax returns

Question 2

Under ASPE,deferred income tax assets due to carry forwards may or may not be recognized,depending whether the company uses the taxes payable method.

Accepted Answer

A) True 
 B)False

Question 3

EGR Ltd.has been in business for five years and incurs a loss of $320,000 in 20x15.The company has no temporary differences.The history of the company's earnings since they began operations is as follows:   The tax rate has been constant at 40%.
Required:
Prepare journal entries to record the recovery of taxes and any journal entries necessary for any loss carry forwards.Assume probability of recovery is greater than 50%

Accepted Answer

20x15 @#IMG-DLM& 
(130,000 + 3

Question 4

JMR Corporation suffered a loss in 2013.As a result,the Corporation has a $87,000 accumulated tax loss carry forward at the tax rate of 40%.The benefit was recorded in the accounts as JMR believed it was more likely than not to be realized.In 2014 the tax rate goes up to 45% and JMR has not yet used the benefit.Which of the following statements is true?

Accepted Answer

A)  No change to the accounts is necessary 
B)  Income tax expense should be increased by $1,740 
C)  Deferred income tax asset-benefit should be increased by $1,740 
D)  Income tax expense should be decreased by $4,350 
A)  No change to the accounts is necessary 
B)  Income tax expense should be increased by $1,740 
C)  Deferred income tax asset-benefit should be increased by $1,740 
D)  Income tax expense should be decreased by $4,350

Question 5

Under IFRS,the income tax expense pertaining to continuing operations must be presented on the face of the income statement.

Accepted Answer

A) True 
 B)False

Question 6

The following information for JG Corporation is available:   JG carries applies its tax losses sequentially,that is,tax losses are carried back as far as possible.The taxes recovered for the year ended 2014 amounted to:

Accepted Answer

A)  $48,600. 
B)  $46,600. 
C)  $52,660. 
D)  $59,100. 
A)  $48,600. 
B)  $46,600. 
C)  $52,660. 
D)  $59,100.

Question 7

JR Ltd.provided you with the following information:   There are no temporary differences.What will be the amount of the tax refund received in 2015 assuming that a policy of tax refund maximization is followed?

Accepted Answer

A)  $32,000 
B)  $172,550 
C)  $176,500 
D)  $80,000 
A)  $32,000 
B)  $172,550 
C)  $176,500 
D)  $80,000

Question 8

Taxes are recovered at the rate at which it was originally paid.The tax rate in the year the loss occurs is not relevant.

Accepted Answer

A) True 
 B)False

Question 9

Deferred tax amounts must be revalued whenever substantially enacted tax rates change.

Accepted Answer

A) True 
 B)False

Question 10

VB Corporation reported a net loss of $50,000 for accounting purposes.Items included in the loss are golf dues amounting to $3,000,meals and entertainment totalling $10,000,CCA of $10,000,depreciation of $5,000,warranty expenses of $8,000 and warranty expenditures of $6,000.VB's taxable income is:

Accepted Answer

A)  ($45,000) 
B)  ($51,000). 
C)  ($57,000). 
D)  ($58,000). 
A)  ($45,000) 
B)  ($51,000). 
C)  ($57,000). 
D)  ($58,000).

Question 11

The following data represents the complete taxable income history for a firm:   What is the amount of the Deferred Tax Asset - carry forward to be recognized on the 2015 statement of financial position at the end of 2015,assuming that the more likely than not criteria has been met,and that the tax rate is expected to remain at 40% for the foreseeable future?

Accepted Answer

A)  $0 
B)  $12,000 
C)  $8,000 
D)  $3,200 
A)  $0 
B)  $12,000 
C)  $8,000 
D)  $3,200

Question 12

A tax loss represents:

Accepted Answer

A)  the final number of the taxable loss on the tax return. 
B)  the amount of refund to be received in the year. 
C)  assistance from the government. 
D)  the present and deferred benefit that the company will be able to realize from the tax loss through a reduction of income taxes. 
A)  the final number of the taxable loss on the tax return. 
B)  the amount of refund to be received in the year. 
C)  assistance from the government. 
D)  the present and deferred benefit that the company will be able to realize from the tax loss through a reduction of income taxes.

Question 13

A tax benefit represents the present and deferred benefit that the company will be able to realize from the tax loss through a reduction of income taxes paid to governments.

Accepted Answer

A) True 
 B)False

Question 14

KG Corporation incurred a tax loss of $345,000.Based on a tax rate of 38%,what is the potential tax benefit?

Accepted Answer

A)  $131,100 
B)  $345,000 
C)  $0 
D)  cannot be determined 
A)  $131,100 
B)  $345,000 
C)  $0 
D)  cannot be determined

Question 15

JG Ltd.has been in business for five years and incurs a loss of $520,000 in 20x15.The company has no temporary differences.The history of the company's earnings since they began operations is as follows:   The tax rate has been constant at 38%.
Required:
Prepare journal entries to record the recovery of taxes and any journal entries necessary for any loss carry forwards.In 20x16,JG incurs a further loss of $40,000.The tax rate changed to 40%.Assume probability of recovery is greater than 50%.

Accepted Answer

20x15 @#IMG-DLM&
 (410,000 *.38) @#IMG-DLM&
 (520,

Question 16

What options are open to a company that had previously set up a deferred income tax benefit of a tax loss carry forward but has now determined that the probability of realization is less than 50%?

Accepted Answer

Companies must determine whether all or

Question 17

JG Corporation incurred a tax loss of $945,000.Based on a tax rate of 38%,what is the potential tax benefit?

Accepted Answer

A)  $0 
B)  $945,000 
C)  $359,100 
D)  cannot be determined 
A)  $0 
B)  $945,000 
C)  $359,100 
D)  cannot be determined

Question 18

JMR Corp.sustained taxable income in 2011 of $50,000 when the tax rate was 40%.In 2012 they suffered a tax loss of $80,000 when the tax rate was 38%.All of the following are true except:

Accepted Answer

A)  JMR Corp. has a potential carry forward of $11,400. 
B)  A more likely than not criteria is needed to set up the benefit. 
C)  The tax refund will amount to $12,000. 
D)  Prior years' tax returns may be amended to create more taxable income. 
A)  JMR Corp. has a potential carry forward of $11,400. 
B)  A more likely than not criteria is needed to set up the benefit. 
C)  The tax refund will amount to $12,000. 
D)  Prior years' tax returns may be amended to create more taxable income.

Question 19

JMR's taxable income for the first five years was as follows:   Calculate the tax recovery in 20x15.

Accepted Answer

The answer of JMR's taxable income for the first five...

Question 20

AG's taxable income for the first five years was as follows:   Calculate the tax recovery in 20x15.

Accepted Answer

The answer of AG's taxable income for the first five...

How can a company use CCA to fully utilize losses that have been incurred?

Under ASPE,deferred income tax assets due to carry forwards may or may not be recognized,depending whether the company uses the taxes payable method.

Under IFRS,the income tax expense pertaining to continuing operations must be presented on the face of the income statement.

The following information for JG Corporation is available: JG carries applies its tax losses sequentially,that is,tax losses are carried back as far as possible.The taxes recovered for the year ended 2014 amounted to:

JR Ltd.provided you with the following information: There are no temporary differences.What will be the amount of the tax refund received in 2015 assuming that a policy of tax refund maximization is followed?

Taxes are recovered at the rate at which it was originally paid.The tax rate in the year the loss occurs is not relevant.

Deferred tax amounts must be revalued whenever substantially enacted tax rates change.

VB Corporation reported a net loss of $50,000 for accounting purposes.Items included in the loss are golf dues amounting to $3,000,meals and entertainment totalling $10,000,CCA of $10,000,depreciation of $5,000,warranty expenses of $8,000 and warranty expenditures of $6,000.VB's taxable income is:

A tax loss represents:

A tax benefit represents the present and deferred benefit that the company will be able to realize from the tax loss through a reduction of income taxes paid to governments.

KG Corporation incurred a tax loss of $345,000.Based on a tax rate of 38%,what is the potential tax benefit?

What options are open to a company that had previously set up a deferred income tax benefit of a tax loss carry forward but has now determined that the probability of realization is less than 50%?

JG Corporation incurred a tax loss of $945,000.Based on a tax rate of 38%,what is the potential tax benefit?

JMR Corp.sustained taxable income in 2011 of $50,000 when the tax rate was 40%.In 2012 they suffered a tax loss of $80,000 when the tax rate was 38%.All of the following are true except:

JMR's taxable income for the first five years was as follows: Calculate the tax recovery in 20x15.

AG's taxable income for the first five years was as follows: Calculate the tax recovery in 20x15.

The Framework for Financial Reporting

Accounting Judgements

Statements of Income and Comprehensive Income

Statements of Financial Position and Changes in Equity; Disclosure Notes

The Statement of Cash Flows

Financial Assets: Cash and Receivables

Cost-Based Inventories and Cost of Sales

Long-Lived Assets

Depreciation, Amortization, and Impairment

Financial Instruments: Investments in Bonds and Equity Securities

Filters

Exam 6: Revenue Recognition

How can a company use CCA to fully utilize losses that have been incurred?

Under ASPE,deferred income tax assets due to carry forwards may or may not be recognized,depending whether the company uses the taxes payable method.

Under IFRS,the income tax expense pertaining to continuing operations must be presented on the face of the income statement.

The following information for JG Corporation is available: JG carries applies its tax losses sequentially,that is,tax losses are carried back as far as possible.The taxes recovered for the year ended 2014 amounted to:

JR Ltd.provided you with the following information: There are no temporary differences.What will be the amount of the tax refund received in 2015 assuming that a policy of tax refund maximization is followed?

Taxes are recovered at the rate at which it was originally paid.The tax rate in the year the loss occurs is not relevant.

Deferred tax amounts must be revalued whenever substantially enacted tax rates change.

VB Corporation reported a net loss of $50,000 for accounting purposes.Items included in the loss are golf dues amounting to $3,000,meals and entertainment totalling $10,000,CCA of $10,000,depreciation of $5,000,warranty expenses of $8,000 and warranty expenditures of $6,000.VB's taxable income is:

A tax loss represents:

A tax benefit represents the present and deferred benefit that the company will be able to realize from the tax loss through a reduction of income taxes paid to governments.

KG Corporation incurred a tax loss of $345,000.Based on a tax rate of 38%,what is the potential tax benefit?

What options are open to a company that had previously set up a deferred income tax benefit of a tax loss carry forward but has now determined that the probability of realization is less than 50%?

JG Corporation incurred a tax loss of $945,000.Based on a tax rate of 38%,what is the potential tax benefit?

JMR Corp.sustained taxable income in 2011 of $50,000 when the tax rate was 40%.In 2012 they suffered a tax loss of $80,000 when the tax rate was 38%.All of the following are true except:

JMR's taxable income for the first five years was as follows: Calculate the tax recovery in 20x15.

AG's taxable income for the first five years was as follows: Calculate the tax recovery in 20x15.

The Framework for Financial Reporting

Accounting Judgements

Statements of Income and Comprehensive Income

Statements of Financial Position and Changes in Equity; Disclosure Notes

The Statement of Cash Flows

Financial Assets: Cash and Receivables

Cost-Based Inventories and Cost of Sales

Long-Lived Assets

Depreciation, Amortization, and Impairment

Financial Instruments: Investments in Bonds and Equity Securities

Filters