Questions from Financial Reporting

Q: For the year ended December 31, 2017, Tyre Company reported

For the year ended December 31, 2017, Tyre Company reported pre-tax financial statement income of $750,000. Its taxable income was $650,000. The difference was due to the use of accelerated depreciati...

Q: Dunn Company’s 2017 income statement reported $90,000 income before

Dunn Company’s 2017 income statement reported $90,000 income before provision for income taxes. To aid in the computation of the provision for federal income taxes, the following 2017 data are provide...

Q: Kent Inc.’s reconciliation between financial statement and taxable income for

Kent Inc.’s reconciliation between financial statement and taxable income for 2017 follows: Pre-tax financial income ………&a...

Q: Black Company, organized on January 2, 2017, had pre

Black Company, organized on January 2, 2017, had pre-tax accounting income of $500,000 and taxable income of $800,000 for the year ended December 31, 2017. The only temporary difference is accrued pro...

Q: Phoenix Co. acquired a large piece of specialized machinery used in

Phoenix Co. acquired a large piece of specialized machinery used in its manufacturing process. The following costs were incurred in connection with the acquisition: Finder’s fee ………………………………………….….….…...

Q: Diamond Offshore Drilling, Inc. (DOD), is an international

Diamond Offshore Drilling, Inc. (DOD), is an international company that provides contract drilling services to the energy industry. In its 2015 Form 10-K, it reports the following information related...

Q: Union Company acquired machinery on January 2, 2017, for $

Union Company acquired machinery on January 2, 2017, for $315,000. The machinery’s estimated useful life is 10 years, and the estimated residual value is $15,000. Union estimates that the machine will...

Q: Gonzo Co. owns a building in Georgia. The building’s historical

Gonzo Co. owns a building in Georgia. The building’s historical cost is $970,000, and $440,000 of accumulated depreciation has been recorded to date. During 2017, Gonzo incurred the following expenses...

Q: On April 1, 2017, Mills Company acquired equipment for $

On April 1, 2017, Mills Company acquired equipment for $125,000. The estimated useful life is six years, and the estimated residual value is $5,000. Mills estimates that the equipment can produce 25,0...

Q: Apex Company purchased a tooling machine on January 3, 2007,

Apex Company purchased a tooling machine on January 3, 2007, for $30,000. The machine was being depreciated on the straight-line method over an estimated useful life of 20 years, with no salvage value...