1.) Discuss the difference between the straight-line method ofdepreciation and the accelerated methods. Why do companies usedifferent depreciation methods for tax reporting and financialreporting?
2.) What is the purpose of listing the account âCommitments andcontingenciesâ on the balance sheet even through no dollar amountsappear?
3.) How is it possible for a company with positive retainedearnings to be unable to pay a cash dividend?
4.) The King Corporation has total annual revenue of $800,000;expenses other than depreciation of $350,000; depreciation expenseof $200,000 for tax purposes; and deprecation expense of $130,000for reporting purposes. The tax rate is 34%. Calculate net incomefor reporting purposes and for tax purposes. What is the deferredtax liability?
1.) Discuss the difference between the straight-line method ofdepreciation and the accelerated methods. Why do companies usedifferent depreciation methods for tax reporting and financialreporting?
2.) What is the purpose of listing the account âCommitments andcontingenciesâ on the balance sheet even through no dollar amountsappear?
3.) How is it possible for a company with positive retainedearnings to be unable to pay a cash dividend?
4.) The King Corporation has total annual revenue of $800,000;expenses other than depreciation of $350,000; depreciation expenseof $200,000 for tax purposes; and deprecation expense of $130,000for reporting purposes. The tax rate is 34%. Calculate net incomefor reporting purposes and for tax purposes. What is the deferredtax liability?
