Questions from Intermediate Accounting

Q: Olympus Motors, Inc., computed a pretax financial income of $

Olympus Motors, Inc., computed a pretax financial income of $90,000 for its first year of operations ended December 31, 2013. In preparing the income tax return for the year, the tax accountant determ...

Q: In accounting for the equity of foreign companies, what is the

In accounting for the equity of foreign companies, what is the primary purpose of equity reserves?

Q: Davidson Gasket Inc. computed a pretax financial loss of $25

Davidson Gasket Inc. computed a pretax financial loss of $25,000 for the first year of its operations, ended December 31, 2013. Analysis of the tax and book bases of its liabilities disclosed $55,000...

Q: What rights of ownership are given up by preferred shareholders? What

What rights of ownership are given up by preferred shareholders? What additional protections are enjoyed by preferred shareholders?

Q: As of December 31, 2013, its first year in business

As of December 31, 2013, its first year in business, Kukui Company had taxable temporary differences totaling $110,000. Of this total, $45,000 relates to current items. Kukui also had deductible tempo...

Q: Why might a company repurchase its own stock?

Why might a company repurchase its own stock?

Q: Stratco Corporation computed a pretax financial income of $40,000

Stratco Corporation computed a pretax financial income of $40,000 for the first year of its operations ended December 31, 2013. Included in financial income was $50,000 of nontaxable revenue, $20,000...

Q: (a) What is the basic difference between the cost method

(a) What is the basic difference between the cost method and the par value method of accounting for treasury stock? (b) How will total stockholders’ equity differ, if at all, under the two methods?

Q: Cheng Company computed taxable income of $8,000 for the

Cheng Company computed taxable income of $8,000 for the first year of its operations ended December 31, 2013. Tax depreciation exceeded depreciation for financial reporting purposes by $24,000. Receip...

Q: There is frequently a difference between the purchase price and the selling

There is frequently a difference between the purchase price and the selling price of treasury stock. Why isn’t this difference shown as a gain or a loss on the income statement?