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(Solved) 9-Assume that Grandzol Company believes that $120,000 of a $600,000 deduction will not be utilized in future periods and that the tax rate is 40


please see document attached with nine questions mutiple choice that I need the answers

9-Assume that Grandzol Company believes that $120,000 of a $600,000 deduction will
not be utilized in future periods and that the tax rate is 40 percent for all periods. What is
the amount of the valuation allowance? $48,000
$120,000
$192,000
$240,000
Question 10
On December 31, 2010, Albacore Company had 300,000 shares of common stock issued and
outstanding. Albacore issued a 10% stock dividend on June 30, 2011. On September 30,
2011, 12,000 shares of common stock were reacquired as treasury stock. What is the
appropriate number of shares to be used in the basic earnings per share computation for
2011?
303,0
00
342,0
00
312,0
00
327,0
00 Question 11
On December 31, 2010, the CPA Company had 100,000 shares of common stock issued and outstanding.
On July 1, 2011, the company sold 20,000 additional shares for cash. CPA's net income for the year
ended December 31, 2011 was $650,000. During 2011, CPA declared and paid $89,000 in cash dividends
on its nonconvertible preferred stock. What is the 2011 basic earnings per share?
5.91
5.61
5.10
None of the
above Question 17 A deferred tax account should be established in order to allocate income tax differences
reflecting the tax impact of
permanent differences
temporary differences
both temporary and permanent difference
none of the above Question 18 The Moore Company has sales of $500,000 that are recorded for book purposes in 2014. For tax
purposes, the company uses the installment sales method, resulting in revenue of $150,000 in
2014 and $350,000 in 2015. A temporary difference of $350,000 originates in 2014 and reverses
in 2015. Assume that the enacted tax rate for 2014 is 30 percent and that the enacted tax rate for
2015 is 40 percent and is known at the time the Deferred Tax account is established. The deferred
tax for the year 2014 results in a Deferred Tax
Asset debit entry
of $105,000
Liability credit
entry of $105,000
Asset debit entry
of $140,000 Liability credit
entry of
$140,000. Question 19
Assume the following facts for Moore Company in 2015: Book income before tax: $800,000. The following items
were included in income:
§ Interest income of $80,000 was received from an
investment in municipal bonds. This income is
exempt for tax purposes.
§ Rent income of $20,000 was collected in 2014 and
included for tax purposes. For book purposes, it was
reported as earned in 2015.
The following items were deducted from income:
§ An asset was purchased during 2015, and
depreciation for book purposes was $40,000. There
was $100,000 deducted for tax purposes.
§ Warranty expense of $20,000 was recognized for book
purposes, while $5,000 was recognized for tax
purposes. (Assume a one-year warranty contract.) The balance of the Deferred Tax Asset account (debit) at
January 1, 2015, was $8,000 as a result of the rent income
temporary difference. The tax rate for all years
was 40 percent. What is the amount of taxable income for
tax purposes?
655,0
00
625,0
00
735,0
00
755,0
00 Question 20
Moore Company had book income before tax of $800,000 in
2015. The following items were included in book income
before tax:
Tax-exempt municipal bond interest income of $80,000.
Rent income of $20,000 that was collected and included in income for tax
purposes in 2014 but reported for book purposes as earned in 2015.
§ Tax depreciation in excess of book depreciation of $60,000. Warranty expense of $20,000 was recognized for book purposes, while
$5,000 was recognized for tax purposes. (Assume a one-year warranty contract.) The balance of the Deferred Tax Asset account
(debit) at January 1, 2015, was $8,000 as a result of
the rent income temporary difference. The tax rate
for all years was 40 percent. What is the balance of
the Deferred Tax Liability account at the end of
2015?
24,0
00
18,0
00 8,00
0
6,00
0 Question 21 Assume that on January 1, 2015, Walt Company issues bonds
with a face value of $300,000 that pay 6 percent
interest, semiannually (3 percent per period)
and mature in 10 years. Assume that the market interest rate
at the date of issuance is 10 percent (5 percent per
semiannual period). What is the issue price of the
bond?
300,00
0 226,265
225,227
210,111 Assume that a bond is issued with the following characteristics:
Date of bonds: January 1, 2015; maturity date: January 1, 2020;
face value: $200,000; face interest rate: 10 percent paid
semiannually (5 percent per period); market interest rate: 8
percent (4 percent per semiannual period); issue price: $216,222;
bond premium is amortized using the straight-line method of
amortization. What is the amount of bond premium amortization
for the June 30, 2015, adjusting entry?
811
8,11
1
16,2
22
1,62
2

 


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