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andre [41]
2 years ago
13

Lance Lawn Services reports warranty expense by estimating the amount that eventually will be paid to satisfy warranties on its

product sales. For tax purposes, the expense is deducted when the cost is incurred. At December 31, 2018, Lance has a warranty liability of $1 million and taxable income of $75 million. At December 31, 2017, Lance reported a deferred tax asset of $435,000 related to this difference in reporting warranties, its only temporary difference. The enacted tax rate is 40% each year. Required: Prepare the appropriate journal entry to record Lance’s income tax provision for 2018.
Business
1 answer:
timofeeve [1]2 years ago
3 0

Answer:

Explanation:

The journal entry is shown below:

Income tax expense A/c Dr $30,035,000

       To Deferred tax asset A/c $35,000

       To Income tax payable A/c $30,000,000

(Being the income tax expense is recorded)

The computation is shown below:

For deferred tax asset:

= Deferred tax rate - Warrant liability × tax rate

= $435,000 - $1,000,000 × 40%

= $435,000 - $400,000

= $35,000

For income tax payable:

= Taxable income × tax rate

= $75,000,000 × 40%

= $30,000,000

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Values are a. acceptable behavior as defined by the company and industry. b. enduring beliefs and ideals that are socially enfor
Mrrafil [7]

Answer:

b. enduring beliefs and ideals that are socially enforced.

Explanation:

Values are general beliefs and ideas shared by some culture or community, which is also acceptable and enforceable by the society.

The common belief of a common individual to take the decision of good or bad by his own, with some values related to ethics is all in context of values.

It impacts individuals in very significant manner as is clearly visible in an individual what kind of values does he carry.

Therefore, correct answer is:

b. enduring beliefs and ideals that are socially enforced.

3 0
3 years ago
Albert just purchased a​ $1,000, 5.4%, 10minusyear bond when he heard about his friend Charlie who just bought a equal quality b
svetoff [14.1K]

Answer:

A) interest rate

Explanation:

Interest rate risk refers to the risk of purchasing a bond that offers a certain coupon and then the price of that bond changes due to changes in the market interest rate.

This can work in your favor, if the market interest rate decreases, you will have a bond that pays above market coupon, which will increase the market value of the bond. But if the market interest rate increases, the market value of your bond will decrease, and you will lose money. This is what happened to Albert, since the market interest rate increased, the value of Albert's bond decreased.

8 0
3 years ago
A new children's hospital is being built in Springfield, and Friendly Corp. has publicly pledged that it will contribute $5 mill
frozen [14]

Answer:

Following are the solution to this question:

Explanation:

By IAS 1 — Annual Report presentation, 3 concepts were all first consideration, its second consistency as well as the third reporting framework related to investment based that can be define as follows:

  • Full accrual basis: its IAS 1 allows an organization to compile all financial reports through an accounting standards basis, with exception of working capital details. Even more cash accounting is a method to record profit or expenditure account balances when they are made.
  • All financial statements throughout the United States were repayment-based. Any cost will not be reported underneath the accrual system once it is accruing. It implies that recognition is irrelevant whenever a company pays cash to pay an expense.
  • Thus the allocation of 2 million to the year that the Pleasant Corp. was created must be listed as just an expense. As well as the remaining payment amount must be listed as expenses once it is paid. Future interventions throughout the current FY should not be published.
  • Also, notice the payment incoming to ensure that you will be prepared when due, but just don't join the way of supporting using the cash method. It simply reports an expense of what you are pay if you make a payment when you choose to use the cash method. Consequently, until the next date, you would not modify your reporting, which is also known as journal entries.
5 0
3 years ago
A customer sells 1 ABC Corporation put for 2 on February 22, 2019, with a strike price of 50 and an expiration date of March 16,
Deffense [45]

Answer: a. He has an acquisition cost of $4,800 and a date of acquisition of March 15, 2007.

Explanation:

A Put amount gives the holder the right to sell underlying assets. As the Put was exercised, the customer would have to buy the underlying stock and the price they will pay for it is the strike price of the Put less the cost of the Put.

Options contracts come in 100s so;

Acquisition cost = (50 - 2) * 100

= 48 * 100

= $4,800.

The date of acquisition is the day the put was exercised.

8 0
3 years ago
Which of the following statements is true regarding the Unrealized Loss on Investments account
max2010maxim [7]

Answer:

B) It is reported on the income statement when it pertains to short term investments

Explanation:

Unrealised loss is defined as a reduction in the value of an asset that is held by an investor rather than selling it and realising a loss.

Unrealised loss is also called paper loss. This loss is not realised until the asset is sold.

Unrealised losses are not usually recorded on the income statement unless they intend to be sold in a short time.

When a security is to be sold in the short run it is called a trading security. Trading securities are represented in the income statement as they can increase or reduce income

8 0
3 years ago
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