(TCO A) Adam's Adorable Creations Company provided the followingfinancial information for its installment sales for the currentyear.
Financial Data:
Installment sales for currentyear $3,000,000
Cost of goods sold on installmentbasis $1,500,000
Repossessed merchandise: Estimatedvalue $18,000
Repossessed merchandise: Unpaidbalances $65,000
Payments bycustomers $2,000,000
Required:
a) Prepare journal entries for theend of the year based on the information above.
b) Prepare the entry to record thegross profit realized in the current year.
. (TCO B) The Accent Corporation shows thefollowinginformation.
On January 1, 2012, Accent purchased a donut machine for$700,000.
A) Pretax financial income is $2,300,000 in 2012 and $2,400,000 in2013.
B) Taxable income is expected in future years with an expected taxrate of 35%.
C) The company recognized an extraordinary gain of $150,000 in 2013(which is fully taxable).
D) Tax-exempt municipal bonds yielded interest of $150,000 in2013.
E) Straight-line basis for 7 years for financial reporting (SeeAppendix 11A.)
F) Half-year convention basis depreciation for 4 years for taxpurposes.
Required:
1) Compute taxable incomeand income taxes payable for 2013.
2) Prepare the journalentries for income tax expense, income taxes payable, and deferredtaxes for 2013.
3) Prepare the deferredincome taxes presentation for December 31, 2013 balance sheet.
(TCO A) Adam's Adorable Creations Company provided the followingfinancial information for its installment sales for the currentyear.
Financial Data:
Installment sales for currentyear $3,000,000
Cost of goods sold on installmentbasis $1,500,000
Repossessed merchandise: Estimatedvalue $18,000
Repossessed merchandise: Unpaidbalances $65,000
Payments bycustomers $2,000,000
Required:
a) Prepare journal entries for theend of the year based on the information above.
b) Prepare the entry to record thegross profit realized in the current year.
. (TCO B) The Accent Corporation shows thefollowinginformation.
On January 1, 2012, Accent purchased a donut machine for$700,000.
A) Pretax financial income is $2,300,000 in 2012 and $2,400,000 in2013.
B) Taxable income is expected in future years with an expected taxrate of 35%.
C) The company recognized an extraordinary gain of $150,000 in 2013(which is fully taxable).
D) Tax-exempt municipal bonds yielded interest of $150,000 in2013.
E) Straight-line basis for 7 years for financial reporting (SeeAppendix 11A.)
F) Half-year convention basis depreciation for 4 years for taxpurposes.
Required:
1) Compute taxable incomeand income taxes payable for 2013.
2) Prepare the journalentries for income tax expense, income taxes payable, and deferredtaxes for 2013.
3) Prepare the deferredincome taxes presentation for December 31, 2013 balance sheet.
