Question 1

Define the effective tax rate.

Accepted Answer

The effective tax rate is the

Question 2

On January 1,Year 2,GHI Inc.had depreciable assets with a book value of $920,000 and a historical cost of $1,000,000.CCA totalling $100,000 had been taken on these assets.During Year 2,depreciation of $80,000 and CCA of $20,000 had been taken on these assets.The tax rate in effect is 35%.For Year 2,the temporary differences arising from the above would result in:

Accepted Answer

A)  a decrease to income tax expense of $21,000. 
B)  an increase to income tax expense of $7,000. 
C)  a decrease to income tax expense of $7,000. 
D)  a decrease to income tax expense of $14,000. 
A)  a decrease to income tax expense of $21,000. 
B)  an increase to income tax expense of $7,000. 
C)  a decrease to income tax expense of $7,000. 
D)  a decrease to income tax expense of $14,000.

Question 3

"Taxable amounts" include revenues and gains that are included in the tax return BEFORE they are recognized for accounting purposes.

Accepted Answer

A) True 
 B)False

Question 4

Provide some arguments for and against the discounting of deferred tax amounts,and explain why these are not discounted.

Accepted Answer

Arguments for:
i)Many deferred tax amoun

Question 5

Temporary differences very seldom reverse (i.e.,turnaround)in one or more future reporting periods.

Accepted Answer

A) True 
 B)False

Question 6

GFH had pre-tax accounting income of $1,400 during 2015.GFH used accelerated depreciation for tax purposes ($1,000)and straight-line depreciation for financial accounting purposes ($200).During 2015 GFH accrued warranty expenses of $900 and paid cash to honour warranties of $500.GFH's taxable income for 2015 would be:

Accepted Answer

A)  $200 
B)  $1,000 
C)  $1,800 
D)  $2,600 
A)  $200 
B)  $1,000 
C)  $1,800 
D)  $2,600

Question 7

Recommended disclosures for the provision for income tax expense include all of the following except:

Accepted Answer

A)  Public companies should disclose the nature of temporary differences 
B)  Income tax expense or benefit should be reported separately on the financial statements 
C)  Income tax expense should not be grouped with other expenses 
D)  Income taxes relating to discontinued items must be disclosed separately on the financial statements 
A)  Public companies should disclose the nature of temporary differences 
B)  Income tax expense or benefit should be reported separately on the financial statements 
C)  Income tax expense should not be grouped with other expenses 
D)  Income taxes relating to discontinued items must be disclosed separately on the financial statements

Question 8

JMR Corp.had one temporary difference during the year.The carrying value of its capital assets for accounting purposes amounted to $350,000; the carrying value for CCA purposes was $380,000.What is the temporary difference amount,what would it be called and where should it be presented on the balance sheet?

Accepted Answer

The temporary difference is $30,000,whic

Question 9

JMR Corporation has one asset worth $350,000.Depreciation accumulated to date is $230,000 and accumulated CCA is $200,000.Assuming the effective tax rate is constant at 40%,this will result in:

Accepted Answer

A)  A Deferred income tax asset of $30,000 
B)  A Deferred income tax liability of $30,000 
C)  A Deferred income tax asset of $12,000 
D)  A Deferred income tax liability of $12,000 
A)  A Deferred income tax asset of $30,000 
B)  A Deferred income tax liability of $30,000 
C)  A Deferred income tax asset of $12,000 
D)  A Deferred income tax liability of $12,000

Question 10

Which of the following is an example of a temporary difference,which could result in a deferred tax asset?

Accepted Answer

A)  Gain on disposal of an asset when included in taxable income before it is included in pre-tax accounting income 
B)  Use of straight-line depreciation for accounting purposes and an accelerated rate for income tax purposes 
C)  Gross margin on instalment sales is recognized for accounting purposes before it is included in taxable income in the income tax return 
D)  Prepayments of expenses in year of payment; recognition of expense for accounting purposes occurs in a later year. 
A)  Gain on disposal of an asset when included in taxable income before it is included in pre-tax accounting income 
B)  Use of straight-line depreciation for accounting purposes and an accelerated rate for income tax purposes 
C)  Gross margin on instalment sales is recognized for accounting purposes before it is included in taxable income in the income tax return 
D)  Prepayments of expenses in year of payment; recognition of expense for accounting purposes occurs in a later year.

Question 11

Kate Corporation sold a truck resulting in a capital gain of $7,600.The amount to be reported for tax purposes is:

Accepted Answer

A)  $7,600 
B)  $0 
C)  $5,700 
D)  $3,800 
A)  $7,600 
B)  $0 
C)  $5,700 
D)  $3,800

Question 12

MNO's taxable income was $900 during 2013.MNO had product warranty costs of $360 recognizable for tax purposes and $400 recognizable for financial accounting purposes.MNO had no other temporary differences.MNO's pre-tax accounting income for 2013 would be:

Accepted Answer

A)  $860 
B)  $900 
C)  $940 
D)  $1,260 
A)  $860 
B)  $900 
C)  $940 
D)  $1,260

Question 13

All temporary differences originate,then reverse,and eventually end with a zero net effect.

Accepted Answer

A) True 
 B)False

Question 14

The general terminology used to describe income tax expense when shown on the statement of comprehensive income is:

Accepted Answer

A)  Income tax expense 
B)  Income tax benefit 
C)  Provision for income tax expense 
D)  Tax expense 
A)  Income tax expense 
B)  Income tax benefit 
C)  Provision for income tax expense 
D)  Tax expense

Question 15

List five items that are temporary differences.

Accepted Answer

1.depreciation for accounting purposes,C

Question 16

During 20014,JBC had pre-tax accounting income of $8,400,originating taxable amounts of $4,800 and originating deductible amounts of $2,400.Calculate JBC's taxable income for 2014.

Accepted Answer

$8,400 - $

Question 17

Ryan Company paid the golf dues of one of its employees.This represents a temporary difference.

Accepted Answer

A) True 
 B)False

Question 18

Explain the difference between a temporary and permanent difference.

Accepted Answer

A temporary difference will,at some poin

Question 19

JMR Corporation has one asset worth $350,000.Depreciation accumulated to date is $200,000 and accumulated CCA is $230,000.Assuming the tax rate is 40% what is the income tax implication?

Accepted Answer

A)  A Deferred income tax asset of $30,000 
B)  A Deferred income tax liability of $30,000 
C)  A Deferred income tax asset of $12,000 
D)  A Deferred income tax liability of $12,000 
A)  A Deferred income tax asset of $30,000 
B)  A Deferred income tax liability of $30,000 
C)  A Deferred income tax asset of $12,000 
D)  A Deferred income tax liability of $12,000

Question 20

Company A had depreciation of $14,000 and CCA of $12,500 during its first year of operations.The tax rates for Years 1 and 2 were 25% and 20% respectively.The Year 2 tax rate was enacted in Year 2.At the end of year 1,this will result in:

Accepted Answer

A)  a deferred income tax asset of $300. 
B)  a deferred income tax liability of $300. 
C)  a deferred income tax asset of $375. 
D)  a deferred income tax liability of $375. 
A)  a deferred income tax asset of $300. 
B)  a deferred income tax liability of $300. 
C)  a deferred income tax asset of $375. 
D)  a deferred income tax liability of $375.

Define the effective tax rate.

"Taxable amounts" include revenues and gains that are included in the tax return BEFORE they are recognized for accounting purposes.

Provide some arguments for and against the discounting of deferred tax amounts,and explain why these are not discounted.

Temporary differences very seldom reverse (i.e.,turnaround)in one or more future reporting periods.

Recommended disclosures for the provision for income tax expense include all of the following except:

JMR Corporation has one asset worth $350,000.Depreciation accumulated to date is $230,000 and accumulated CCA is $200,000.Assuming the effective tax rate is constant at 40%,this will result in:

Which of the following is an example of a temporary difference,which could result in a deferred tax asset?

Kate Corporation sold a truck resulting in a capital gain of $7,600.The amount to be reported for tax purposes is:

MNO's taxable income was $900 during 2013.MNO had product warranty costs of $360 recognizable for tax purposes and $400 recognizable for financial accounting purposes.MNO had no other temporary differences.MNO's pre-tax accounting income for 2013 would be:

All temporary differences originate,then reverse,and eventually end with a zero net effect.

The general terminology used to describe income tax expense when shown on the statement of comprehensive income is:

List five items that are temporary differences.

During 20014,JBC had pre-tax accounting income of $8,400,originating taxable amounts of $4,800 and originating deductible amounts of $2,400.Calculate JBC's taxable income for 2014.

Ryan Company paid the golf dues of one of its employees.This represents a temporary difference.

Explain the difference between a temporary and permanent difference.

JMR Corporation has one asset worth $350,000.Depreciation accumulated to date is $200,000 and accumulated CCA is $230,000.Assuming the tax rate is 40% what is the income tax implication?

Company A had depreciation of $14,000 and CCA of $12,500 during its first year of operations.The tax rates for Years 1 and 2 were 25% and 20% respectively.The Year 2 tax rate was enacted in Year 2.At the end of year 1,this will result in:

The Framework for Financial Reporting

Accounting Judgements

Statements of Income and Comprehensive Income

Statements of Financial Position and Changes in Equity; Disclosure Notes

Revenue Recognition

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 5: The Statement of Cash Flows

Define the effective tax rate.

"Taxable amounts" include revenues and gains that are included in the tax return BEFORE they are recognized for accounting purposes.

Provide some arguments for and against the discounting of deferred tax amounts,and explain why these are not discounted.

Temporary differences very seldom reverse (i.e.,turnaround)in one or more future reporting periods.

Recommended disclosures for the provision for income tax expense include all of the following except:

JMR Corporation has one asset worth $350,000.Depreciation accumulated to date is $230,000 and accumulated CCA is $200,000.Assuming the effective tax rate is constant at 40%,this will result in:

Which of the following is an example of a temporary difference,which could result in a deferred tax asset?

Kate Corporation sold a truck resulting in a capital gain of $7,600.The amount to be reported for tax purposes is:

MNO's taxable income was $900 during 2013.MNO had product warranty costs of $360 recognizable for tax purposes and $400 recognizable for financial accounting purposes.MNO had no other temporary differences.MNO's pre-tax accounting income for 2013 would be:

All temporary differences originate,then reverse,and eventually end with a zero net effect.

The general terminology used to describe income tax expense when shown on the statement of comprehensive income is:

List five items that are temporary differences.

During 20014,JBC had pre-tax accounting income of $8,400,originating taxable amounts of $4,800 and originating deductible amounts of $2,400.Calculate JBC's taxable income for 2014.

Ryan Company paid the golf dues of one of its employees.This represents a temporary difference.

Explain the difference between a temporary and permanent difference.

JMR Corporation has one asset worth $350,000.Depreciation accumulated to date is $200,000 and accumulated CCA is $230,000.Assuming the tax rate is 40% what is the income tax implication?

Company A had depreciation of $14,000 and CCA of $12,500 during its first year of operations.The tax rates for Years 1 and 2 were 25% and 20% respectively.The Year 2 tax rate was enacted in Year 2.At the end of year 1,this will result in:

The Framework for Financial Reporting

Accounting Judgements

Statements of Income and Comprehensive Income

Statements of Financial Position and Changes in Equity; Disclosure Notes

Revenue Recognition

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