Let's assume that we are not addressing a change in method, but rather the original year...
Homework Answers
Financial reporting is different than tax reporting. For tax reporting purpose company tend to accelerate depreciation in initial years to get tax benefit. However in financial reporting purpose they have to be prudent and follow accounting principles which show correct value of assets on the reporting date. Using excess depreciation may not show the correct value and may affect the stakeholders analysis of the company. Thus company may choose to apply different methods of depreciation like SLM for financial reporting and ADM for tax purposes
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Let's assume that we are not addressing a change in method, but
rather the original year...
//img.homeworklib.com/questions/47af8930-7488-11ea-9488-a9a0c222f67f.jpg Required: a-1. Find the discussion of Property, Plant, and Equipment and depreciation methods used by...
//img.homeworklib.com/questions/47af8930-7488-11ea-9488-a9a0c222f67f.jpg
Required: a-1. Find the discussion of Property, Plant, and Equipment and depreciation methods used by Campbell's. Use data from the Campbell Soup Company annual report Straight-line method Double declining method Written down value method a-2. Why the particular method is used for the purpose described. Straight-line depreciation is used for financial reporting purposes because depreciation expense will be lower than under any of the accelerated depreciation methods. Straight-line depreciation is used for financial reporting purposes because depreciation expense will...
Dexter Company appropriately uses the asset-liability method to record deferred income taxes. Dexter reports depreciation expense...
Dexter Company appropriately uses the asset-liability method to record deferred income taxes. Dexter reports depreciation expense for certain machinery purchased this year using the modified accelerated cost recovery system (MACRS) for income tax purposes and the straight-line basis for financial reporting purposes. The tax deduction is the larger amount this year. Dexter received rent revenues in advance this year. These revenues are included in this year's taxable income. However, for financial reporting purposes, these revenues are reported as unearned revenues,...
1.) Discuss the difference between the straight-line method of depreciation and the accelerated methods. Why do...
1.) Discuss the difference between the straight-line method of depreciation and the accelerated methods. Why do companies use different depreciation methods for tax reporting and financial reporting? 2.) What is the purpose of listing the account “Commitments and contingencies” on the balance sheet even through no dollar amounts appear? 3.) How is it possible for a company with positive retained earnings to be unable to pay a cash dividend? 4.) The King Corporation has total annual revenue of $800,000; expenses...
question C: im done eoth a and c. im not sure about c 421 On August...
question C: im done eoth a and c. im not sure about c
421 On August 3, Cinco Construction purchased special-purpose equipment at a cost of $1,000,000. The useful life of the equipment was estimated to be eight years, with an estimated residual value of $50,000. S a. Compute the depreciation expense to be recognized each calendar year for financial reporting purposes under the straight-line depreciation method (half-year convention). b. Compute the depreciation expense to be recognized each calendar year...
A corporation has pretax financial accounting (book) income of $146,000 in year 3. Additional information (for...
A corporation has pretax financial accounting (book) income of $146,000 in year 3. Additional information (for year 3) is as follows: 1. Municipal bond interest income is $35,000. 2. Life insurance premium expense, where the corporation is the beneficiary per books is $4,000. 3. Accelerated depreciation is used for tax purposes, while straight-line is used for books. Tax depreciation is $10,000; book depreciation is $5,000. 4. Estimated warranty expense of $500 is accrued for book purposes. Additional details that may...
On January 1, 2015, Swift Corporation, a small manufacturer of machine tools, acquired new indust...
On January 1, 2015, Swift Corporation, a small manufacturer of
machine tools, acquired new industrial equipment for $1,320,000.
The new equipment had a useful life of five years and the residual
value was estimated to be $60,000. Swift estimates that the new
equipment can produce 14,500 machine tools in its first year. It
estimates that production will decline by 1,000 units per year over
the equipment’s remaining useful life.
The following depreciation methods may be used: (1) straight-line,
(2) double-declining-balance,...
1.) How is a common-size balance sheet created? 2.) Discuss how marketable securities are valued on...
1.) How is a common-size balance sheet created? 2.) Discuss how marketable securities are valued on the balance sheet. 3.) How can the allowance for doubtful accounts be used to assess earnings quality? 4.) Why is the valuation of inventories important in financial reporting? 5.) Why would a company switch to the LIFO method of inventory valuation in an inflationary period? 6.) Which inventory valuation method, FIFO or LIFO, will generally produce an ending inventory value on the balance sheet...
2.) Discuss how marketable securities are valued on the balance sheet. 3.) How can the allowance...
2.) Discuss how marketable securities are valued on the balance sheet. 3.) How can the allowance for doubtful accounts be used to assess earnings quality? 4.) Why is the valuation of inventories important in financial reporting? 5.) Why would a company switch to the LIFO method of inventory valuation in an inflationary period? 6.) Which inventory valuation method, FIFO or LIFO, will generally produce an ending inventory value on the balance sheet that is closest to current cost? 7.) Discuss...
Listed below are items that are commonly accounted for differently for financial reporting purposes than they...
Listed below are items that are commonly accounted for
differently for financial reporting purposes than they are for tax
purposes.
For each item below, indicate whether it involves:
(1)
A temporary difference that will result in future deductible
amounts and, therefore, will usually give rise to a deferred income
tax asset.
(2)
A temporary difference that will result in future taxable
amounts and, therefore, will usually give rise to a deferred income
tax liability.
(3)
A permanent difference.
Use the...
с 22-10 Researching GAAP AICPA Adapted Sometimes a business entity may change its method of accounting...
с 22-10 Researching GAAP AICPA Adapted Sometimes a business entity may change its method of accounting for certain items. It may classify the change as a change in accounting principle, a change in accounting estimate, or a change in reporting entity. The following are three situations faced by Hyde Company relating to accounting changes Situation I Hyde determined that the depreciable lives of its fixed assets are presently too long to fairly match the cost of the fixed assets with...
//img.homeworklib.com/questions/47af8930-7488-11ea-9488-a9a0c222f67f.jpg
Required: a-1. Find the discussion of Property, Plant, and Equipment and depreciation methods used by Campbell's. Use data from the Campbell Soup Company annual report Straight-line method Double declining method Written down value method a-2. Why the particular method is used for the purpose described. Straight-line depreciation is used for financial reporting purposes because depreciation expense will be lower than under any of the accelerated depreciation methods. Straight-line depreciation is used for financial reporting purposes because depreciation expense will...
question C: im done eoth a and c. im not sure about c
421 On August 3, Cinco Construction purchased special-purpose equipment at a cost of $1,000,000. The useful life of the equipment was estimated to be eight years, with an estimated residual value of $50,000. S a. Compute the depreciation expense to be recognized each calendar year for financial reporting purposes under the straight-line depreciation method (half-year convention). b. Compute the depreciation expense to be recognized each calendar year...
A corporation has pretax financial accounting (book) income of $146,000 in year 3. Additional information (for year 3) is as follows: 1. Municipal bond interest income is $35,000. 2. Life insurance premium expense, where the corporation is the beneficiary per books is $4,000. 3. Accelerated depreciation is used for tax purposes, while straight-line is used for books. Tax depreciation is $10,000; book depreciation is $5,000. 4. Estimated warranty expense of $500 is accrued for book purposes. Additional details that may...
On January 1, 2015, Swift Corporation, a small manufacturer of
machine tools, acquired new industrial equipment for $1,320,000.
The new equipment had a useful life of five years and the residual
value was estimated to be $60,000. Swift estimates that the new
equipment can produce 14,500 machine tools in its first year. It
estimates that production will decline by 1,000 units per year over
the equipment’s remaining useful life.
The following depreciation methods may be used: (1) straight-line,
(2) double-declining-balance,...
Listed below are items that are commonly accounted for
differently for financial reporting purposes than they are for tax
purposes.
For each item below, indicate whether it involves:
(1)
A temporary difference that will result in future deductible
amounts and, therefore, will usually give rise to a deferred income
tax asset.
(2)
A temporary difference that will result in future taxable
amounts and, therefore, will usually give rise to a deferred income
tax liability.
(3)
A permanent difference.
Use the...
с 22-10 Researching GAAP AICPA Adapted Sometimes a business entity may change its method of accounting for certain items. It may classify the change as a change in accounting principle, a change in accounting estimate, or a change in reporting entity. The following are three situations faced by Hyde Company relating to accounting changes Situation I Hyde determined that the depreciable lives of its fixed assets are presently too long to fairly match the cost of the fixed assets with...
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