only the portion of the loss attributable to inventory sold during the period is recorded in the financial statements. B. the market value figure for ending inventory is substituted for cost and the loss is buried in cost of goods sold C. a loss is recorded directly in the inventory account by crediting inventory and debiting loss on inventory decline. D. there is a direct reduction in the selling price of the product that results in a loss being recorded on the income statement prior to the sale. 15) Designated market value A. may sometimes exceed net realizable value. B. should always be equal to net realizable value less a normal profit margin.
1(b) The next question is how should the $25,000 you received as reimbursement for expenses paid for up front be treated in terms of income taxes. As you stated, the $25,000 was received as reimbursement for expenses that you paid up front. The first thing we would need to consider is whether or not you deducted the expenses within the tax returns for prior years. If the expenses were deducted as business activities in prior years, then the $25,000 would be taxable. However, if the expenses incurred while working on this case were not deducted previously, then they would be non-taxable.
Line 17—Disposition of exercised the option is not taxable for the excess, if any, of: Property the regular tax. His regular tax basis in 1. The fair market value of the stock the stock at the end of 2009 is $20,000. Your AMT gain or loss from the For the AMT, however, Ash must acquired through exercise of the option disposition of property may be different include the $180,000 as an adjustment (determined without regard to any lapse from your gain or loss for the regular on his 2009 Form 6251. His AMT basis restriction) when your rights in the tax.
Should impairment testing be completed on intangible assets, and if so, how often? 3. How should prior periods be corrected for financial reporting and taxes to correct incorrect treatment for intangible asset expenses? Conclusions: 1. ASC 350-30-35-1: Expenses related to intangible assets that have a finite useful life must be capitalized and amortized over the useful life of the intangible assets.
|The bargain element on a nonqualified option is taxed to employees at capital gain rates. | No tax effect is incurred by employees or employers on the grant date, unless the restrictions lapse on the date on which the options are granted (which would have the same effect as assuming there is no restriction on sale of the stock). Page 11, 12. Employee considerations – both NQSO and ISOs Which of the following refers to the date stock options are awarded to an employee? |a.
e) What is the company’s operating income for the current year? f) What is the company’s EBITDA for the current year? g) What is the company’s net income/earnings (final profit or loss) for the current year? h) What are the company’s earnings per share (basic and diluted) for the current year? (notes) i) What is the actual name used by the company to identify this particular document?
What amount of unrealized inter-company profit must be deferred by Luffman? | | Your Answer: | | | $0 | | CORRECT | | | $8,400 | | | | | $28,000 | | | | | $52,000 | | | | | $80,000 | | | | | | Points Received: | 2 of 2 | | Comments: | | 2. | Question: | (TCO 1) Which of the following results in a decrease in the Equity in Investee Income account when applying the equity method? | | Your Answer: | | | Dividends paid by the investor | | | | | Net income of the investee | | INCORRECT | | | Unrealized gain on inter-company inventory transfers for the current year | | CORRECT ANSWER | | | Unrealized gain on inter-company inventory transfers for the prior year | | | | | Extraordinary gain of the investee | | | | | | Points Received: | 0 of 2 | | Comments: | | 3. | Question: | (TCO 1) In a situation where the investor exercises significant influence over the investee, which of the following entries is not actually posted to the books of the investor?
A business pays weekly salaries of $20,000 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on Thursday is a. debit Salaries Payable, $16,000; credit Cash, $16,000 b. debit Salary Expense, $16,000; credit Dividends, $16,000 c. debit Salary Expense, $16,000; credit Salaries Payable, $16,000 d. debit Drawing, $16,000; credit Cash, $16,000 ANS: C DIF: Difficult OBJ: 03-02 NAT: AACSB Analytic | AICPA FN-Measurement 34. The balance in the prepaid insurance account before adjustment at the end of the year is $10,000. If the additional data for the adjusting entry is (1) "the amount of insurance expired during the year is $8,500," as compared to additional data stating (2) "the amount of unexpired insurance applicable to a future period is $1,500," for the adjusting entry: a. the debit and credit amount for (1) would be the same as (2) but the accounts would be different b. the accounts for (1) would be the same as the accounts for (2) but the amounts would be different c. the accounts and amounts would be the same for both (1) and (2) d. there is not enough information given to determine the correct accounts and amounts ANS: C DIF: Difficult OBJ: 03-02 NAT: AACSB Analytic | AICPA
If a company pays out dividends, it may reduce their capability to pay their liabilities. The first entry is the retained earnings from the previous financial period. The next entry is the net income from the income statement. If dividends were paid to shareholders, the amount would be deducted from the sum of previous retained earnings and the net income. The result would be the retained earnings from the current financial period.