Questions from Intermediate Accounting

Q: Fore Farms reported a pretax operating loss of $137 million for

Fore Farms reported a pretax operating loss of $137 million for financial reporting purposes in 2024. Contributing to the loss were (a) a penalty of $5 million assessed by the Environmental Protection...

Q: The long-term liabilities section of CPS Transportation’s December 31,

The long-term liabilities section of CPS Transportation’s December 31, 2023, balance sheet included the following: a. A lease liability with 15 remaining lease payments of $10,000 ea...

Q: True Developers, Inc., sells plots of land for industrial development

True Developers, Inc., sells plots of land for industrial development. True recognizes income for financial reporting purposes in the year it sells the plots. For some of the plots sold this year, Tru...

Q: Shyer Co. reports net operating income (loss) for financial

Shyer Co. reports net operating income (loss) for financial reporting and tax purposes in each year as follows: Shyer’s 2020 NOL is driven by an unfortunate obsolescence of its prima...

Q: Times-Roman Publishing Company reports the following amounts in its first

Times-Roman Publishing Company reports the following amounts in its first three years of operation: The difference between pretax accounting income and taxable income is due to subscription revenue fo...

Q: Dixon Development began operations in December 2024. When lots for industrial

Dixon Development began operations in December 2024. When lots for industrial development are sold, Dixon recognizes income for financial reporting purposes in the year of the sale. For some lots, Dix...

Q: Refer to the situation described in BE 11–17. Assume

Refer to the situation described in BE 11–17. Assume that the undiscounted sum of estimated future cash flows is $24 million instead of $28 million. What amount of impairment loss should C&R report in...

Q: Zakary Corporation would have had identical income before taxes on both its

Zakary Corporation would have had identical income before taxes on both its income tax returns and income statements for the years 2024 through 2027 except for differences in depreciation on an operat...

Q: The De Ville Company reported pretax accounting income on its income statement

The De Ville Company reported pretax accounting income on its income statement as follows: Included in the income of 2024 was an installment sale of property in the amount of $50,000. However, for tax...

Q: You are the new accounting manager at the Barry Transport Company.

You are the new accounting manager at the Barry Transport Company. Your CFO has asked you to provide input on the company’s income tax position based on the following: 1. Pretax accounting income was...