Refer to the situation described in BE 8–14. Assuming an income tax rate of 25%, what is LIFO liquidation profit or loss that the company would report in a disclosure note accompanying its financial statements?
> On January 1, 2024, True Fashions Corporation awarded restricted stock units (RSUs) representing 12 million of its $1 par common shares to key personnel, subject to forfeiture if employment is terminated within three years. After the recipients of the RS
> On December 31, 2023, Barclay Inc. had 200 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2024, Barclay purchased 24 million shares of its common stock as treasury
> On December 31, 2023, Barclay Inc. had 200 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2024, Barclay purchased 24 million shares of its common stock as treasury
> On December 31, 2023, Barclay Inc. had 200 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2024, Barclay purchased 24 million shares of its common stock as treasury
> On December 31, 2023, Barclay Inc. had 200 million shares of common stock and 3 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2024, Barclay purchased 24 million shares of its common stock as treasury
> Selected financial statement data for Schmitzer Inc. is shown below: Calculate the gross profit ratio and inventory turnover ratio in 2024.
> At December 31, 2023, Albrecht Corporation had outstanding 373,000 shares of common stock and 8,000 shares of 9.5%, $100 par value cumulative, nonconvertible preferred stock. On May 31, 2024, Albrecht sold for cash 12,000 shares of its common stock. No c
> Hardaway Fixtures’ balance sheet at December 31, 2023, included the following: On July 21, 2024, Hardaway issued a 25% stock dividend on its common stock. On December 12, it paid $50,000 cash dividends on the preferred stock. Net income
> The Li Group had 202,000 shares of common stock outstanding at January 1, 2024. The following activities affected common shares during the year. There are no potential common shares outstanding. Required: 1. Determine the 2024 EPS. 2. Determine the 2025
> For the year ended December 31, 2024, Nor star Industries reported net income of $655,000. At January 1, 2024, the company had 900,000 common shares outstanding. The following changes in the number of shares occurred during 2024: Required: Compute nor st
> Microsoft Corporation’s disclosure notes for the year ending June 30, 2020, included the following regarding its $0.00000625 par common stock: Required: Prepare the journal entry that summarizes Microsoft’s employee s
> In order to encourage employee ownership of the company’s $1 par common shares, Washington Distribution permits any of its employees to buy shares directly from the company through payroll deduction. There are no brokerage fees and shares can be purchase
> Allied Paper Products, Inc., offers a restricted stock award plan to its vice presidents. On January 1, 2024, the company granted 16 million of its $1 par common shares, subject to forfeiture if employment is terminated within two years. The common share
> A partially completed pension spreadsheet showing the relationships among the elements that comprise the defined benefit pension plan of Universal Products is given below. The actuary’s discount rate is 5%. At the end of 2022, the pensi
> Luciana Fashions calculated pension expense for its underfunded pension plan as follows: Required: Which elements of Luciana’s balance sheet are affected by the components of pension expense? What are the specific changes in these acco
> Hicks Cable Company has a defined benefit pension plan. Three alternative possibilities for pension-related data at January 1, 2024, are shown below: Required: 1. For each independent case, calculate any amortization of the net loss or gain that should
> Walgreens Boots Alliance, Inc., reported inventories of $9,451 million and $9,333 million in its August 31, 2020, and August 31, 2019, balance sheets, respectively. Cost of goods sold for the year ended August 31, 2020, was $111,520 million. The company
> Clark Industries has a defined benefit pension plan that specifies annual, year-end retirement benefits equal to 1.2% × Service years × Final year’s salary Stanley Mills was hired by Clark at the beginning of 2005. Mills is expected to retire at the end
> Pension data for Barry Financial Services Inc. include the following: Required: 1. Determine pension expense for 2024. 2. Prepare the journal entries to record (a) pension expense, (b) gains and losses (if any), (c) funding, and (d) retiree benefits for
> Abbott and Abbott has a noncontributory, defined benefit pension plan. At December 31, 2024, Abbott and Abbott received the following information: The expected long-term rate of return on plan assets was 10%. There was no prior service cost and a negligi
> Refer to the situation described in E 17–8. Required: How might your answer differ if we assume Sterling Properties prepares its financial statements according to International Financial Reporting Standards (IFRS)? The interest rate on high-grade corpor
> Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org). Determine the specific eight-digit Codification citation (XXX-XX-XX-X) for accounting for each of the following items: 1. The disclosure required in the notes to the fi
> Frazier Refrigeration amended its defined benefit pension plan on December 31, 2024, to increase retirement benefits earned with each service year. The consulting actuary estimated the prior service cost incurred by making the amendment retroactive to pr
> Southeast Technology provides postretirement health care benefits to employees. On January 1, 2024, the following plan-related data were available: On January 1, 2024, Southeast amends the plan in response to spiraling health care costs. The amendment es
> Gorky-Park Corporation provides postretirement health care benefits to employees who provide at least 12 years of service and reach age 62 while in service. On January 1, 2024, the following plan-related data were available: On January 1, 2024, Gorky-Par
> Tsai-Ming Company has a postretirement health care benefit plan. On January 1, 2024, the following plan related data were available: The rate of return on plan assets during 2024 was 10%, although it was expected to be 9%. The actuary revised assumptions
> Pension data for Sterling Properties include the following Required: Determine pension expense for 2024.
> Refer to the situation described in BE 8–17. Now assume the FIFO ending inventory is only $45,000 greater than LIFO ending inventory. Record the year-end adjusting entry for the LIFO reserve.
> Data pertaining to the postretirement health care benefit plan of Sterling Properties include the following for 2024: Required: 1. Determine the postretirement benefit expense for 2024. 2. Prepare the appropriate journal entries to record the (a) postret
> Loran Management Services has an unfunded postretirement benefit plan. On December 31, 2024, the following data were available concerning changes in the plan’s accumulated postretirement benefit obligation with respect to one of Loran&a
> The following data are available pertaining to Household Appliance Company’s retiree health care plan for 2024: Required: 1. What is the accumulated postretirement benefit obligation at the beginning of 2024? 2. What is interest cost to
> Classified Electronics has an unfunded retiree health care plan. Each of the company’s three employees has been with the firm since its inception at the beginning of 2023. As of the end of 2024, the actuary estimates the total net cost of providing healt
> Refer to the situation described in E 17–21. Required: How might your solution differ if Lacy Construction prepares its financial statements according to International Financial Reporting Standards (IFRS)? Assume the actuary’s discount rate is the rate
> Lacy Construction has a noncontributory, defined benefit pension plan. At December 31, 2024, Lacy received the following information: The expected long-term rate of return on plan assets was 10%. There were no AOCI balances related to pensions on January
> Refer to the data provided in E 17–19. Required: Prepare a pension spreadsheet to show the relationship among the PBO, plan assets, prior service cost, the net gain, pension expense, and the net pension asset.
> Beale Management has a noncontributory, defined benefit pension plan. On December 31, 2024 (the end of Beale’s fiscal year), the following pension-related data were available: Required: 1. Prepare the 2024 journal entry to record pensi
> Patel Industries has a noncontributory, defined benefit pension plan. Since the inception of the plan, the actuary has used as the discount rate the rate on high-quality corporate bonds, which recently has been 7%. During 2024, changing economic conditio
> Actuary and trustee reports indicate the following changes in the PBO and plan assets of MA homes Industries during 2024: Required: 1. Determine the company’s pension expense for 2024, and prepare the appropriate journal entry to recor
> King Supply maintains its internal inventory records using perpetual FIFO, but for financial reporting purposes, reports ending inventory and cost of goods sold using periodic LIFO. At the beginning of the year, the company had a balance of $60,000 in it
> On January 1, 2024, Retch Corporation’s projected benefit obligation was $30 million. During 2024, pension benefits paid by the trustee were $4 million. Service cost for 2024 is $12 million. Pension plan assets (at fair value) increased during 2024 by $6
> Southern Atlantic Distributors began operations in January 2024 and purchased a delivery truck for $40,000. Southern Atlantic plans to use straight-line depreciation over a four-year expected useful life for financial reporting purposes. For tax purposes
> At the end of 2023, Payne Industries had a deferred tax asset account with a balance of $25 million attributable to a temporary book-tax difference of $100 million in a liability for estimated expenses. At the end of 2024, the temporary difference is $64
> At the end of 2023, Payne Industries had a deferred tax asset account with a balance of $25 million attributable to a temporary book-tax difference of $100 million in a liability for estimated expenses. At the end of 2024, the temporary difference is $64
> Lance Lawn Services reports warranty expense by estimating the amount that eventually will be paid to satisfy warranties on its product sales. For tax purposes, the expense is deducted when the warranty work is completed. At December 31, 2024, Lance has
> In 2024, DFS Medical Supply collected rent revenue for 2025 tenant occupancy. For income tax reporting, the rent is taxed when collected. For financial statement reporting, the rent is recorded as deferred revenue and then recognized as revenue in the pe
> Ayres Services acquired an asset for $80 million in 2024. The asset is depreciated for financial reporting purposes over four years on a straight-line basis (no residual value). Ayers deducted 100% of the asset’s cost for income tax rep
> Ayres Services acquired an asset for $80 million in 2024. The asset is depreciated for financial reporting purposes over four years on a straight-line basis (no residual value). For tax purposes the asset’s cost is depreciated by MACRS.
> Medlock Inc. reports net operating income (loss) for financial reporting and tax purposes in each year as follows: Medlock’s federal tax rate decreased from 35% to 21% starting in 2018. Medlock accounts for its 2020 NOL under the CARES
> Hillock Inc. reports net operating income (loss) for financial reporting and tax purposes in each year as follows: Halleck’s federal tax rate decreased from 35% to 21% starting in 2018. Hillock accounts for its 2020 NOL under the CARES
> Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org) and select Basic View for free access. What is the specific eight-digit Codification citation (XXX-XX-XX-X) that applies to each of the following items? 1. The specific
> As of December 31, 2024, Lange Company has the following deferred tax assets and liabilities: Required: 1. Assume that all of Lange’s deferred tax assets and liabilities are in the same tax jurisdiction. How would deferred taxes be sho
> Case Development began operations in December 2024. When property is sold on an installment basis, Case recognizes installment income for financial reporting purposes in the year of the sale. For tax purposes, installment income is reported by the instal
> Case Development began operations in December 2024. When property is sold on an installment basis, Case recognizes installment income for financial reporting purposes in the year of the sale. For tax purposes, installment income is reported by the instal
> Wynn Farms reported a net operating loss of $160,000 for financial reporting and tax purposes in 2024. The enacted tax rate is 25%. Taxable income, tax rates, and income taxes paid in Wynn’s first four years of operation were as follows
> On January 1, 2021, Amen Company purchased major pieces of manufacturing equipment for a total of $36 million. Amen uses straight-line depreciation for financial statement reporting and deducted 100% of the equipment’s cost for income tax reporting in 20
> Wynn Farms reported a net operating loss of $100,000 for financial reporting and tax purposes in 2024. The enacted tax rate is 25%. Taxable income, tax rates, and income taxes paid in Wynn’s first four years of operation were as follows
> Assume the same facts as in E 16-23. During 2025, Babinski reported income of $200,000 for financial reporting and tax purposes. The enacted tax rate is 25%. Required: 1. Prepare the journal entry to recognize Babinski’s 2025 tax expense or tax benefit.
> During 2024, its first year of operations, Babinski Steel Corporation reported a net operating loss of $360,000 for financial reporting and tax purposes. The enacted tax rate is 25%. Required: 1. Prepare the journal entry to recognize the income tax ben
> The information that follows pertains to Richards Refrigeration, Inc.: a. At December 31, 2024, temporary differences existed between the financial statement book values and the tax bases of the following ($ in millions): b. No temporary differences exis
> Esquire Inc. uses the LIFO method to report its inventory. Inventory at the beginning of the year was $500,000 (20,000 units at $25 each). During the year, 80,000 units were purchased, all at the same price of $30 per unit. 85,000 units were sold during
> The information that follows pertains to Esther Food Products: a. At December 31, 2024, temporary differences were associated with the following future taxable (deductible) amounts: b. No temporary differences existed at the beginning of 2024. c. Pretax
> Swenson Industries reported a deferred tax asset of $5 million for the year ended December 31, 2023, related to a temporary difference of $20 million. The tax rate was 25%. The temporary difference is expected to reverse in 2025, at which time the deferr
> Bronson Industries reported a deferred tax liability of $5 million for the year ended December 31, 2023, related to a temporary difference of $20 million. The tax rate was 25%. The temporary difference is expected to reverse in 2025, at which time the de
> Arnold Industries has pretax accounting income of $32 million for the year ended December 31, 2024. The tax rate is 25%. The only difference between accounting income and taxable income relates to an operating lease in which Arnold is the lessee. The inc
> Almond Corporation, organized on January 3, 2024, had pretax accounting income of $14 million and taxable income of $20 million for the year ended December 31, 2024. The 2024 tax rate is 25%. The only difference between accounting income and taxable inco
> For the year ended December 31, 2024, Fidelity Engineering reported pretax accounting income of $978,000. Selected information for 2024 from Fidelity’s records follows: Interest income on municipal governmental bonds $32,000 Depreciation claimed on the 2
> On January 1, 2021, Amen Company purchased major pieces of manufacturing equipment for a total of $36 million. Amen uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. At December 31, 2023, the book value
> Eye Deal Optometry leased vision-testing equipment from Insight Machines on January 1, 2024. Insight Machines manufactured the equipment at a cost of $200,000 and lists a cash selling price of $250,177. Appropriate adjusting entries are made quarterly.
> Each of the three independent situations below describes a finance lease in which annual lease payments are payable at the end of each year. The lessee is aware of the lessor’s implicit rate of return. Required: For each situation, det
> Manufacturers Southern leased high-tech electronic equipment from International Machines on January 1, 2024. International Machines manufactured the equipment at a cost of $85,000. Manufacturers Sothern’s fiscal year ends December 31.
> Thaler Inc. holds a $1 million receivable ($800,000 principal, $200,000 accrued interest) from Einhorn Industries, and agrees to settle the receivable outright for $900,000 given Einhorn’s difficult financial situation. How much gain or loss should Thale
> Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended February 1, 2020, are available in Connect. This material also is available under the Investor Relations li
> Edison Leasing leased high-tech electronic equipment to Manufacturers Southern on January 1, 2024. Edison purchased the equipment from International Machines at a cost of $112,080. Required: Prepare a lease amortization schedule and appropriate entries
> Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2024. Edison purchased the equipment from International Machines at a cost of $112,080. Required: Prepare a lease amortization schedule and appropriate entrie
> On June 30, 2024, Georgia-Atlantic, Inc., leased warehouse equipment from Builders, Inc. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $562,907 over a three-year lease term (also the asset’s useful life), payable eac
> To raise operating funds, National Distribution Center sold its office building to an insurance company on January 1, 2024, for $800,000 and immediately leased the building back. The operating lease is for the final 12 years of the building’s estimated 2
> To raise operating funds, Signal Aviation sold an airplane on January 1, 2024, to a finance company for $770,000. Signal immediately leased the plane back for a 13-year period, at which time ownership of the airplane will transfer to Signal. The airplan
> Microsoft Corporation reported the following disclosure note in its 2020 financial statements: Required: 1. Prepare a journal entry that summarizes the cash payments for operating leases during the year. 2. Prepare a journal entry that summarizes the ca
> Access the FASB’s Codification Research System® at the FASB website (www.fasb.org) and select Basic View. Determine the specific seven- or eight-digit Codification citation (XXX-XX-XX-X) for accounting for each of the following items: 1. Definition of in
> The following relate to an operating lease agreement: a. The lease term is three years, beginning January 1, 2024. b. The leased asset cost the lessor $800,000 and had a useful life of eight years with no residual value. The lessor uses straight-line dep
> The lease agreement and related facts indicate the following: a. Leased equipment had a retail cash selling price of $300,000. Its useful life was five years with no residual value. b. The lease term was five years and the lessor paid $265,000 to acquire
> On June 30, 2024, Georgia-Atlantic, Inc., leased warehouse equipment from IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $562,907 over a three-year lease term (also the asset’s useful life), pa
> Shan Enterprises received a bank statement listing its May 31, 2024, bank balance as $47,582. Shan determined that as of May 31 it had cash receipts of $2,500 that were not yet deposited and checks outstanding of $7,224. Calculate Shan’s correct May 31,
> Terms of a lease agreement and related facts were as follows: a. Incremental costs of commissions for brokering the lease and consummating the completed lease transaction incurred by the lessor were $4,242. b. The retail cash selling price of the leased
> On January 1, 2024, NRC Credit Corporation leased equipment to Brand Services under a finance/sales-type lease designed to earn NRC a 12% rate of return for providing long-term financing. The lease agreement specified the following: a. Ten annual payment
> Warren Marina owns a large marina that contains numerous boat slips of various sizes. Warren contracts with boat owners to provide slips to house the customers’ boats. Lucky Fisher Fleet contracted with Warren to provide space for four of its fishing boa
> Warren Marina owns a large marina that contains numerous boat slips of various sizes. Warren contracts with boat owners to provide slips to house the customers’ boats. Lucky Fisher Fleet contracted with Warren to provide space for four of its fishing boa
> Universal Leasing leases electronic equipment to a variety of businesses. The company’s primary service is providing alternate financing by acquiring equipment and leasing it to customers under long-term sales-type leases. Universal earns interest under
> Federated Fabrications leased a tooling machine on January 1, 2024, for a three-year period ending December 31, 2026. The lease agreement specified annual payments of $36,000 beginning with the first payment at the beginning of the lease, and each Decem
> Each of the four independent situations below describes a sales-type lease in which annual lease payments of $100,000 are payable at the beginning of each year. Each is a finance lease for the lessee. Determine the following amounts at the beginning of t
> At January 1, 2024, Café Med leased restaurant equipment from Crescent Corporation under a nine-year lease agreement. The lease agreement specifies annual payments of $25,000 beginning January 1, 2024, the beginning of the lease, and on each December 31
> On January 1, 2024, Rick’s Pawn Shop leased a truck from Corey Motors for a six-year period with an option to extend the lease for three years. Rick’s had no significant economic incentive as of the beginning of the lease to exercise the three-year exten
> On January 1, 2024, Taco King leased retail space from Fogelman Properties. The 10-year finance lease requires quarterly variable lease payments equal to 3% of Taco King’s sales revenue, with a quarterly sales minimum of $400,000. Payments at the beginni
> Marin Company’s general ledger indicates a cash balance of $22,340 as of September 30, 2024. Early in October Marin received a bank statement indicating that during September Marin had an NSF check of $1,500 returned to a customer and incurred service ch
> On June 30, 2024, Georgia-Atlantic, Inc., leased warehouse equipment from IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $562,907 over a three-year lease term, payable each June 30 and December
> On January 1, 2024, Quick Stream Communications leased telephone equipment from Degum, Inc. Degums cash selling price for the equipment is $1,306,578. The lease agreement specifies six annual payments of $300,000 beginning December 31, 2024, and on each
> On January 1, 2024, we tick Optometrists leased diagnostic equipment from Southern Corp., which had purchased the equipment at a cost of $1,437,237. The lease agreement specifies six annual payments of $300,000 beginning January 1, 2024, the beginning o
> Natick Industries leased high-tech instruments from Framingham Leasing on January 1, 2024. Natick has the option to renew the lease at the end of two years for an additional three years. Natick is subject to a $45,000 penalty after two years if it fails
> Chance Enterprises leased equipment from Third Bank Leasing on January 1, 2024. Chance elected the short-term lease option. Required: Prepare appropriate entries for Chance from the beginning of the lease through April 1, 2024.
> On January 1, 2024, Neath Angstrom Services, Inc., a computer software training firm, leased several computers under a two-year operating lease agreement from Computer World Leasing, which routinely finances equipment for other firms at an annual interes
