ga527940
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Posts: 11
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| Posted: 20 Jan 2009 at 23:22 | IP Logged
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I just have one week remaining, and need you help.
1.
AmeriGene Inc. reported net periodic pension cost of $400,000 in 20X9, calculated as follows:
Service cost $300,000
Interest cost 175,000
Expected return on plan assets (100,000)
Amortization of prior service cost 40,000
Amortization of net gain (15,000)
Net periodic pension cost $400,000
AmeriGene has an overfunded pension plan. The company's effective tax rate is 30%. How will the amortization of the net gain affect the 20X9 balance sheet?
The answer is b. $10,500 increase in retained earnings. But I don't know why.
2.
Quinn Co. reported a net deferred tax asset of $9,000 in its December 31, 1993, balance sheet. For 1994, Quinn reported pretax financial statement income of $300,000. Temporary differences of $100,000 resulted in taxable income of $200,000 for 1994. At December 31, 1994, Quinn had cumulative taxable differences of $70,000. Quinn's effective income tax rate is 30%. In its December 31, 1994, income statement, what should Quinn report as deferred income tax expense?
The answer is $30,000. I don't know why.
3.
Compared to the accrual basis of accounting, the cash basis of accounting understates income by the net decrease during the accounting period of:
Accounts &nbs p; Accrued
Receivable &n bsp; Expenses
The answer is No, Yes. Why?
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