Question: The following defined pension data of Doreen

> Data for Krauss Company are presented in E23-5. Instructions Prepare the operating activities section of the statement of cash flows using the indirect method. From E23-5: Krauss Company’s income statement for the year ended December

> Lowell Corporation has used the accrual basis of accounting for several years. A review of the records, however, indicates that some expenses and revenues have been handled on a cash basis because of errors made by an inexperienced bookkeeper. Income sta

> Krauss Company’s income statement for the year ended December 31, 2017, contained the following condensed information. Krauss’s balance sheet contained the following comparative data at December 31. (Accounts payab

> Below is the comparative balance sheet for Stevie Wonder Corporation. Dividends in the amount of $15,000 were declared and paid in 2017. Instructions From this information, prepare a worksheet for a statement of cash flows. Make reasonable assumptions

> Tedesco Company changed depreciation methods in 2017 from double-declining-balance to straight-line. Depreciation prior to 2017 under double-declining-balance was $90,000, whereas straight-line depreciation prior to 2017 would have been $50,000. Tedesco’

> The transactions below took place during the year 2017. 1. Convertible bonds payable with a par value of $300,000 were exchanged for unissued common stock with a par value of $300,000. The market price of both types of securities was par. 2. The net in

> Data for Anita Baker Company are presented in E23-18. Instructions Prepare entries in journal form for all adjustments that should be made on a worksheet for a statement of cash flows. From E23-18 The accounts below appear in the ledger of Anita Baker

> The accounts below appear in the ledger of Anita Baker Company. Instructions From the postings in the accounts above, indicate how the information is reported on a statement of cash flows by preparing a partial statement of cash flows using the indire

> Jobim Inc. had the following condensed balance sheet at the end of operations for 2016. During 2017, the following occurred. 1. A tract of land was purchased for $9,000. 2. Bonds payable in the amount of $15,000 were redeemed at par. 3. An additiona

> The balance sheet data of Brown Company at the end of 2017 and 2016 follow. Land was acquired for $30,000 in exchange for common stock, par $30,000, during the year; all equipment purchased was for cash. Equipment costing $10,000 was sold for $3,000; b

> The following data are taken from the records of Alee Company. Additional information: 1. Held-to-maturity securities carried at a cost of $43,000 on December 31, 2016, were sold in 2017 for $34,000. The loss (not unusual) was incorrectly charged dir

> Data for Brecker Inc. are presented in E23-13. Instructions Prepare a statement of cash flows using the indirect method. From E23-13: Brecker Inc., a greeting card company, had the following statements prepared as of December 31, 2017. Additional in

> On March 5, 2018, you were hired by Hemingway Inc., a closely held company, as a staff member of its newly created internal auditing department. While reviewing the company’s records for 2016 and 2017, you discover that no adjustments h

> Brecker Inc., a greeting card company, had the following statements prepared as of December 31, 2017. Additional information: 1. Dividends in the amount of $6,000 were declared and paid during 2017. 2. Depreciation expense and amortization expense ar

> Data for Pat Metheny Company are presented in E23-11. Instructions Prepare a statement of cash flows using the direct method. (Do not prepare a reconciliation schedule.) From E23-11: Condensed financial data of Pat Metheny Company for 2017 and 2016 a

> Condensed financial data of Pat Metheny Company for 2017 and 2016 are presented below. Additional information: During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2017. Instructions Prepare a sta

> Morlan Corporation is preparing its December 31, 2017, financial statements. Two events that occurred between December 31, 2017, and March 10, 2018, when the statements were issued, are described below. 1. A liability, estimated at $160,000 at December 3

> Various types of accounting changes can affect the financial statements of a business enterprise differently. Assume that the following list describes changes that have a material effect on the financial statements for the current year of your business e

> On January 1, 2017, Evans Company entered into a noncancelable lease for a machine to be used in its manufacturing operations. The lease transfers ownership of the machine to Evans by the end of the lease term. The term of the lease is 8 years. The minim

> Each of the following items must be considered in preparing a statement of cash flows for Cruz Fashions Inc. for the year ended December 31, 2017. 1. Fixed assets that had cost $20,000 6½ years before and were being depreciated on a 10-year basis, with

> Teresa Ramirez and Lenny Traylor are examining the following statement of cash flows for Pacific Clothing Store’s first year of operations. Teresa claims that Pacific’s statement of cash flows is an excellent portray

> The following statement was prepared by Maloney Corporation’s accountant. The following additional information relating to Maloney Corporation is available for the year ended September 30, 2017. 1. Salaries and wages expense attribut

> On January 1, 2017, Perriman Company sold equipment for cash and leased it back. As seller-lessee, Perriman retained the right to substantially all of the remaining use of the equipment. The term of the lease is 8 years. There is a gain on the sale porti

> You have been assigned to examine the financial statements of Zarle Company for the year ended December 31, 2017. You discover the following situations. 1. Depreciation of $3,200 for 2017 on delivery vehicles was not recorded. 2. The physical inventory

> In 2016, Grishell Trucking Company negotiated and closed a long-term lease contract for newly constructed truck terminals and freight storage facilities. The buildings were erected to the company’s specifications on land owned by the co

> For each of the unrelated transactions described below, present the entry(ies) required to record each transaction. 1. Grand Corp. issued $20,000,000 par value 10% convertible bonds at 99. If the bonds had not been convertible, the company’s inves

> If the bonds in Question 8 are classified as available-forsale and they have a fair value at December 31, 2017, of $3,604,000, prepare the journal entry (if any) at December 31, 2017, to record this transaction.

> On July 1, 2017, Wheeler Company purchased $4,000,000 of Duggen Company’s 8% bonds, due on July 1, 2024. The bonds, which pay interest semiannually on January 1 and July 1, were purchased for $3,500,000 to yield 10%. Determine the amount of interest reve

> Kalin Corporation had 2017 net income of $1,000,000. During 2017, Kalin paid a dividend of $2 per share on 100,000 shares of preferred stock. During 2017, Kalin had outstanding 250,000 shares of common stock. Compute Kalin’s 2017 earnings per share.

> The book basis of depreciable assets for Erwin Co. is $900,000, and the tax basis is $700,000 at the end of 2018. The enacted tax rate is 34% for all periods. Determine the amount of deferred taxes to be reported on the balance sheet at the end of 2018.

> Explain how trading debt securities are accounted for and reported.

> When should a debt security be classified as held-to-maturity?

> A headline in the Wall Street Journal stated, “Firms Increasingly Tap Their Pension Funds to Use Excess Assets.” What is the accounting issue related to the use of these “excess assets” through plan terminations?

> Boey Company reported net income of $25,000 in 2018. It had the following amounts related to its pension plan in 2018: Actuarial liability gain $10,000; Unexpected asset loss $14,000; Accumulated other comprehensive income (G/L) (beginning balance), zero

> Addison Co. has one temporary difference at the beginning of 2017 of $500,000. The deferred tax liability established for this amount is $150,000, based on a tax rate of 30%. The temporary difference will provide the following taxable amounts: $100,000 i

> Feagler Company’s current income taxes payable related to its taxable income for 2017 is $460,000. In addition, Feagler’s deferred tax asset decreased $20,000 during 2017. What is Feagler’s income tax expense for 2017?

> Lee Company’s current income taxes payable related to its taxable income for 2017 is $320,000. In addition, Lee’s deferred tax liability increased $40,000 and its deferred tax asset increased $10,000 during 2017. What is Lee’s income tax expense for 2017

> Hanson Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2017, the following balances related to this plan. Plan assets (market-related value)………….$520,000 Projected benefit obligation………………………700,000 Pension asset/liability

> Hollenbeck Foods Inc. sponsors a postretirement medical and dental benefit plan for its employees. The following balances relate to this plan on January 1, 2017. Plan assets……………………………………………………………$200,000 Expected postretirement benefit obligation………………8

> On January 1, 2017 (the date of grant), Lutz Corporation issues 2,000 shares of restricted stock to its executives. The fair value of these shares is $75,000, and their par value is $10,000. The stock is forfeited if the executives do not complete 3 year

> Kramer Co. has prepared the following pension worksheet. Unfortunately, several entries in the worksheet are not decipherable. The company has asked your assistance in completing the worksheet and completing the accounting tasks related to the pension pl

> Youngman Corporation has temporary differences at December 31, 2017, that result in the following deferred taxes. Deferred tax asset…………$24,000 Deferred tax liability……….69,000 Indicate how these balances would be presented in Youngman’s December 31, 20

> Ramirez Company has a held-for-collection investment in the 6%, 20-year bonds of Soto Company. The investment was originally purchased for $1,200,000 in 2016. Early in 2017, Ramirez recorded an impairment of $300,000 on the Soto investment, due to Soto’s

> Rode Inc. incurred a net operating loss of $500,000 in 2017. Combined income for 2015 and 2016 was $350,000. The tax rate for all years is 40%. Rode elects the carryback option. Prepare the journal entries to record the benefits of the loss carryback and

> At December 31, 2017, Hillyard Corporation has a deferred tax asset of $200,000. After a careful review of all available evidence, it is determined that it is probable that $60,000 of this deferred tax asset will not be realized. Prepare the necessary jo

> Buhl Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2017, the following balances relate to this plan. Plan assets……………………….$480,000 Defined benefit obligation…..600,000 Pension asset/liability…………..120,000 As a result of

> Tevez Company experienced an actuarial loss of $750 in its defined benefit plan in 2017. For 2017, Tevez’s revenues are $125,000, and expenses (excluding pension expense of $14,000, which does not include the actuarial loss) are $85,000. Prepare Tevez’s

> Villa Company has experienced tough competition, leading it to seek concessions from its employees in the company’s pension plan. In exchange for promises to avoid layoffs and wage cuts, the employees agreed to receive lower pension benefits in the futur

> Use the information for Rode Inc. given in IFRS19-7. Assume that it is probable that the entire net operating loss carryforward will not be realized in future years. Prepare the journal entry(ies) necessary at the end of 2017. From IFRS19-7: Rode Inc. i

> Refer to the data for Barwood Corporation in BE16-6. Repeat the requirements assuming that instead of options, Barwood granted 2,000 shares of restricted stock. From BE16-6: On January 1, 2017, Barwood Corporation granted 5,000 options to executives. Ea

> At December 31, 2017, Cascade Company had a net deferred tax liability of $450,000. An explanation of the items that compose this balance is as follows. Temporary Differences in Deferred Taxes…………………Resulting Balances 1. Excess of tax depreciation over b

> Petrenko Corporation has outstanding 2,000 $1,000 bonds, each convertible into 50 shares of $10 par value ordinary shares. The bonds are converted on December 31, 2017. The bonds payable has a carrying value of $1,950,000 and conversion equity of $20,000

> At December 31, 2016, Belmont Company had a net deferred tax liability of $375,000. An explanation of the items that compose this balance is as follows. Resulting Balances………………………Temporary Differences in Deferred Taxes 1. Excess of tax depreciation over

> Using the information in E20-2, prepare a pension worksheet inserting January 1, 2017, balances, showing December 31, 2017, balances, and the journal entry recording pension expense. From E20-2: Veldre Company provides the following information about it

> The following facts apply to the pension plan of Boudreau Inc. for the year 2017. Plan assets, January 1, 2017………………………………..$490,000 Projected benefit obligation, January 1, 2017………….490,000 Settlement rate…………………………………………………………….8% Service cost……………………

> In 2017, Steinrotter Construction Corp. began construction work under a 3-year contract. The contract price was $1,000,000. Steinrotter uses the percentage-of-completion method for financial accounting purposes. The income to be recognized each year is b

> Capulet Company establishes a stock-appreciation rights program that entitles its new president Ben Davis to receive cash for the difference between the market price of the stock and a pre-established price of $30 (also market price) on December 31, 2013

> On May 1, 2017, Richardson Inc. entered into a contract to deliver one of its specialty mowers to Kickapoo Landscaping Co. The contract requires Kickapoo to pay the contract price of $900 in advance on May 15, 2017. Kickapoo pays Richardson on May 15, 20

> On December 31, 2013, Beckford Company issues 150,000 stock-appreciation rights to its officers entitling them to receive cash for the difference between the market price of its stock and a pre-established price of $10. The fair value of the SARs is esti

> Winsor Inc. recently purchased Holiday Corp., a large midwestern home painting corporation. One of the terms of the merger was that if Holiday’s income for 2017 was $110,000 or more, 10,000 additional shares would be issued to Holiday’s stockholders in 2

> On January 1, 2017, Barwood Corporation granted 5,000 options to executives. Each option entitles the holder to purchase one share of Barwood’s $5 par value common stock at $50 per share at any time during the next 5 years. The market price of the stock

> Sarazan Company issues a 4-year, 7.5% fixed-rate interest only, nonprepayable $1,000,000 note payable on December 31, 2016. It decides to change the interest rate from a fixed rate to variable rate and enters into a swap agreement with M&S Corp. The swap

> Using the information in E20-22, prepare a worksheet inserting January 1, 2017, balances, showing December 31, 2017, balances, and the journal entry recording postretirement benefit expense. From E20-22: Englehart Co. provides the following information

> Garner Inc. provides the following information related to its postretirement benefits for the year 2017. Accumulated postretirement benefit obligation at January 1, 2017…………………………………………$710,000 Actual and expected return on plan assets……….34,000 Prior se

> On January 2, 2017, Jones Company purchases a call option for $300 on Merchant common stock. The call option gives Jones the option to buy 1,000 shares of Merchant at a strike price of $50 per share. The market price of a Merchant share is $50 on January

> Englehart Co. provides the following information about its postretirement benefit plan for the year 2017. Service cost………………………………………………….$ 90,000 Prior service cost amortization…………………………..3,000 Contribution to the plan……………………………………56,000 Actual and ex

> Presented below is selected information related to the financial instruments of Dawson Company at December 31, 2017. This is Dawson Company’s first year of operations. Instructions a. Dawson elects to use the fair value option for th

> Veldre Company provides the following information about its defined benefit pension plan for the year 2017. Service cost……………………………………………………….$ 90,000 Contribution to the plan……………………………………….105,000 Prior service cost amortization……………………………….10,000 Act

> Kreter Co. provides the following information about its postretirement benefit plan for the year 2017. Service cost…………………………………………………..$ 45,000 Contribution to the plan…………………………………….10,000 Actual and expected return on plan assets………….11,000 Benefits p

> On January 1, 2017, Pennington Corporation purchased 30% of the common shares of Edwards Company for $180,000. During the year, Edwards earned net income of $80,000 and paid dividends of $20,000. Instructions Prepare the entries for Pennington to reco

> Webb Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2017, the following balances relate to this plan. Plan assets…………………………………$480,000 Projected benefit obligation…………..600,000 Pension asset/liability…………………….120,000 Accu

> At December 31, 2017, Suffolk Corporation had an estimated warranty liability of $105,000 for accounting purposes and $0 for tax purposes. (The warranty costs are not deductible until paid.) The effective tax rate is 40%. Compute the amount Suffolk shoul

> For the following investments, identify whether they are: 1. Trading debt securities. 2. Available-for-sale debt securities. 3. Held-to-maturity debt securities. 4. None of the above. Each case is independent of the other. a. A bond that will mature

> Norton Co. had the following amounts related to its pension plan in 2017. Actuarial liability loss for 2017……………………………………………………………………………$28,000 Unexpected asset gain for 2017……………………………………………………………………………18,000 Accumulated other comprehensive income (G/L

> Hawkins Corporation has the following balances at December 31, 2017. Projected benefit obligation………$2,600,000 Plan assets at fair value……………..2,000,000 Accumulated OCI (PSC)………………1,100,000 How should these balances be reported on Hawkins’ balance sheet

> Shin Corporation had a projected benefit obligation of $3,100,000 and plan assets of $3,300,000 at January 1, 2017. Shin also had a net actuarial loss of $465,000 in accumulated OCI at January 1, 2017. The average remaining service period of Shin’s emplo

> At December 31, 2017, Besler Corporation had a projected benefit obligation of $560,000, plan assets of $322,000, and prior service cost of $127,000 in accumulated other comprehensive income. Determine the pension asset/liability at December 31, 2017.

> Mancuso Corporation amended its pension plan on January 1, 2017, and granted $160,000 of prior service costs to its employees. The employees are expected to provide 2,000 service years in the future, with 350 service years in 2017. Compute prior service

> Campbell Soup Company reported pension expense of $73 million and contributed $71 million to the pension fund. Prepare Campbell Soup Company’s journal entry to record pension expense and funding, assuming Campbell has no OCI amounts.

> For 2017, Sampsell Inc. computed its annual postretirement expense as $240,900. Sampsell’s contribution to the plan during 2017 was $180,000. Prepare Sampsell’s 2017 entry to record postretirement expense, assuming Sampsell has no OCI amounts.

> Manno Corporation has the following information available concerning its postretirement benefit plan for 2017. Service cost………………………………………………………$40,000 Interest cost……………………………………………………….47,400 Actual and expected return on plan assets…………..26,900 Compu

> AMR Corporation (parent company of American Airlines) reported the following (in millions). Service cost…………………………….$366 Interest on P.B.O………………………737 Return on plan assets………………..593 Amortization of prior service cost….13 Amortization of net loss……………..

> At December 31, 2017, Appaloosa Corporation had a deferred tax liability of $25,000. At December 31, 2018, the deferred tax liability is $42,000. The corporation’s 2018 current tax expense is $48,000. What amount should Appaloosa report as total 2018 inc

> Shetland Inc. had pretax financial income of $154,000 in 2017. Included in the computation of that amount is insurance expense of $4,000 which is not deductible for tax purposes. In addition, depreciation for tax purposes exceeds accounting depreciation

> Mitchell Corporation had income before income taxes of $195,000 in 2017. Mitchell’s current income tax expense is $48,000, and deferred income tax expense is $30,000. Prepare Mitchell’s 2017 income statement, beginning with Income before income taxes.

> At December 31, 2017, Hillyard Corporation has a deferred tax asset of $200,000. After a careful review of all available evidence, it is determined that it is more likely than not that $60,000 of this deferred tax asset will not be realized. Prepare the

> At December 31, 2017, Percheron Inc. had a deferred tax asset of $30,000. At December 31, 2018, the deferred tax asset is $59,000. The corporation’s 2018 current tax expense is $61,000. What amount should Percheron report as total 2018 income tax expense

> Using the information from BE19-2, assume this is the only difference between Oxford’s pretax financial income and taxable income. Prepare the journal entry to record the income tax expense, deferred income taxes, and income taxes payable, and show how t

> Oxford Corporation began operations in 2017 and reported pretax financial income of $225,000 for the year. Oxford’s tax depreciation exceeded its book depreciation by $40,000. Oxford’s tax rate for 2017 and years thereafter is 30%. In its December 31, 20

> Youngman Corporation has temporary differences at December 31, 2017, that result in the following deferred taxes. Deferred tax liability related to depreciation difference…………$38,000 Deferred tax asset related to warranty liability………………………..62,000 Defer

> Use the information for Rode Inc. given in BE19-13. Assume that it is more likely than not that the entire net operating loss carryforward will not be realized in future years. Prepare all the journal entries necessary at the end of 2017. From BE19-13:

> Rode Inc. incurred a net operating loss of $500,000 in 2017. Combined income for 2015 and 2016 was $350,000. The tax rate for all years is 40%. Rode elects the carryback option. Prepare the journal entries to record the benefits of the loss carryback and

> Conlin Corporation had the following tax information. In 2018, Conlin suffered a net operating loss of $480,000, which it elected to carry back. The 2018 enacted tax rate is 29%. Prepare Conlin’s entry to record the effect of the loss

> Carow Corporation purchased on January 1, 2017, as a held-to-maturity investment, $60,000 of the 8%, 5-year bonds of Harrison, Inc. for $65,118, which provides a 6% return. The bonds pay interest semiannually. Prepare Carow’s journal entries for a. the

> At December 31, 2017, Fell Corporation had a deferred tax liability of $680,000, resulting from future taxable amounts of $2,000,000 and an enacted tax rate of 34%. In May 2018, a new income tax act is signed into law that raises the tax rate to 40% for

> Clydesdale Corporation has a cumulative temporary difference related to depreciation of $580,000 at December 31, 2017. This difference will reverse as follows: 2018, $42,000; 2019, $244,000; and 2020, $294,000. Enacted tax rates are 34% for 2018 and 2019

> In 2017, Amirante Corporation had pretax financial income of $168,000 and taxable income of $120,000. The difference is due to the use of different depreciation methods for tax and accounting purposes. The effective tax rate is 40%. Compute the amount to

> On January 2, 2017, Adani Inc. sells goods to Geo Company in exchange for a zero-interest-bearing note with face value of $11,000, with payment due in 12 months. The fair value of the goods at the date of sale is $10,000 (cost $6,000). Prepare the journa

> Archer Construction Company began work on a $420,000 construction contract in 2017. During 2017, Archer incurred costs of $278,000, billed its customer for $215,000, and collected $175,000. At December 31, 2017, the estimated additional costs to complete

> Guillen, Inc. began work on a $7,000,000 contract in 2017 to construct an office building. Guillen uses the completed-contract method. At December 31, 2017, the balances in certain accounts were Construction in Process $1,715,000, Accounts Receivable $24