CHAPTER 18 REVENUE RECOGNITION IFRS questions are available at the end of this chapter. TRUE-FALSe—Conceptual Answer No. Description F 1. Recognition of revenue. T 2.
1. For the year-end December 31, 2007, financial statement, what amount should M record as a liability? According to FASB 450-20-25-1, when a loss contingency exists, the likelihood that the future event or events will confirm the loss or impairment of an asset or the incurrence of a liability can range from probable to remote. An estimated loss from a loss contingency shall be accrued by a charge to income if both of the following conditions are met a. Information available before the financial statements are issued or are available to be issued indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statement.
Common stock h 15. Land c 16. Bond sinking fund b 17. Inventory a 18. Prepaid insurance a 19.
30% Withholding Tax Nonresident individuals earning rental income and other fixed and determinable annual or periodic income which are not effectively connected with trade or business are taxed at a flat rate of 30%, withheld by the tenant. Electing Business Income Option Nonresident individuals earning rental income can elect to consider this income as effectively connected with trade or business. Through this option, the taxpayer will be taxed on his net income at progressive rates. CAPITAL GAINS TAX Capital gains incurred for the transfer of property in Guam is taxed as in the US. The taxable gain is computed by deducting the acquisition costs (adjusted for inflation) and transfer costs from the selling price.
I have determined that you have to account for all qualified business expenses and only net income will be taxable. 2. Jane Smith tax issues: a. What are the different tax consequences between paying down the mortgage (debt) and assuming a new mortgage (debt) for federal income tax purposes? If the mortgage is paid off, you'll lose the mortgage deduction on your federal income taxes.
a. Adjusted trial balance b. Comparative balance sheets c. Current income statement d. Additional information 4. The primary purpose of the statement of cash flows is to a. provide information about the investing and financing activities during a period. b. prove that revenues exceed expenses if there is a net income.
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Exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest cost. Page 1 of 6 b. c. d. Borrowing cost that entitles for tax deduction under subsection 33(1) of ITA 1967 does not include legal fee, guarantee fee, professional fee and other fees/costs incur for obtaining the loan except for entity on which money is its stock in trade. 2. OBJECTIVE The objective of these Guidelines is to
8. 9. 5 7 3, 4 6 8 9 10 11 3 3 2 9 5, 6, 7 *10. Tax depreciation (MACRS). 12 *This material is covered in an Appendix to the chapter.
Any expense accounts would be listed on the debit side. A debit increases the balance of the asset and expense accounts. Decreases the balance of liability, revenue, and owner equity. Expenses In what two ways is the word credit defined in Debits and Credits? A credit is on the right side of the T-account.