2.) Discuss how marketable securities are valued on the balancesheet. 3.) How can the allowance for doubtful accounts be used toassess earnings quality? 4.) Why is the valuation of inventoriesimportant in financial reporting? 5.) Why would a company switch tothe LIFO method of inventory valuation in an inflationary period?6.) Which inventory valuation method, FIFO or LIFO, will generallyproduce an ending inventory value on the balance sheet that isclosest to current cost? 7.) Discuss the difference between thestraight-line method of depreciation and the accelerated methods.Why do companies use different depreciation methods for taxreporting and financial reporting? 8.) What is the purpose oflisting the account âCommitments and contingenciesâ on the balancesheet even through no dollar amounts appear? 9.) How is it possiblefor a company with positive retained earnings to be unable to pay acash dividend? 10.) The King Corporation has total annual revenueof $800,000; expenses other than depreciation of $350,000;depreciation expense of $200,000 for tax purposes; and deprecationexpense of $130,000 for reporting purposes. The tax rate is 34%.Calculate net income for reporting purposes and for tax purposes.What is the deferred tax liability?
2.) Discuss how marketable securities are valued on the balancesheet. 3.) How can the allowance for doubtful accounts be used toassess earnings quality? 4.) Why is the valuation of inventoriesimportant in financial reporting? 5.) Why would a company switch tothe LIFO method of inventory valuation in an inflationary period?6.) Which inventory valuation method, FIFO or LIFO, will generallyproduce an ending inventory value on the balance sheet that isclosest to current cost? 7.) Discuss the difference between thestraight-line method of depreciation and the accelerated methods.Why do companies use different depreciation methods for taxreporting and financial reporting? 8.) What is the purpose oflisting the account âCommitments and contingenciesâ on the balancesheet even through no dollar amounts appear? 9.) How is it possiblefor a company with positive retained earnings to be unable to pay acash dividend? 10.) The King Corporation has total annual revenueof $800,000; expenses other than depreciation of $350,000;depreciation expense of $200,000 for tax purposes; and deprecationexpense of $130,000 for reporting purposes. The tax rate is 34%.Calculate net income for reporting purposes and for tax purposes.What is the deferred tax liability?
