Lahey Corp. has three defined-benefit pension plans as follows.
Pension Assets(at Fair Value) / Projected Benefit
Obligation
Plan X / $622,700 / $510,600
Plan Y / 944,200 / 730,500
Plan Z / 581,600 / 741,000
How will Lahey report these multiple plans in its financial statements?
Pension Asset / $Pension Liability / $
Question 22
For 2012, Sampsell Inc. computed its annual postretirement expense as $273,190. Sampsell's contribution to the plan during 2012 was $184,200. Prepare Sampsell's 2012 entry to record postretirement expense.(List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.)
Description/Account / Debit / CreditPostretirement Expense Pension Expense Pension Asset/Liability Cash Postretirement asset/Liability /
Postretirement asset/Liability Cash Pension Asset/Liability Postretirement Expense Pension Expense /
Cash Pension Asset/Liability Postretirement Expense Pension Expense Postretirement asset/Liability /
Question 23
Wertz Corporation decided at the beginning of 2012 to change from the completed-contract method to the percentage-of-completion method for financial reporting purposes. The company will continue to use completed-contract method for tax purposes. For years prior to 2012, pre-tax income under the two methods was as follows: percentage-of-completion $145,900, and completed-contract $51,500. The tax rate is 31%. Prepare Wertz's 2012 journal entry to record the change in accounting principle.(For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)
Description / Debit / CreditConstruction Revenue Cost of Goods Sold Deferred Tax Asset Accounts Receivable Construction in Process Retained Earnings Tax Expense Accounts Payable Deferred Tax Liability / $
Cost of Goods Sold Construction Revenue Accounts Payable Deferred Tax Asset Accounts Receivable Deferred Tax Liability Tax Expense Retained Earnings Construction in Process / $
Retained Earnings Accounts Payable Accounts Receivable Deferred Tax Asset Tax Expense Deferred Tax Liability Cost of Goods Sold Construction Revenue Construction in Process / $
Question 24
In 2012, Bailey Corporation discovered that equipment purchased on January 1, 2010, for $27,500 was expensed at that time. The equipment should have been depreciated over 5 years, with no salvage value. The effective tax rate is 31%. Prepare Hiatt's 2012 journal entry to correct the error.(For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)
Description / Debit / CreditDeferred Tax Asset Accumulated Depreciation Depreciation Expense Income Tax Expense Equipment Retained Earnings Deferred Tax Liability / $
Income Tax Expense Depreciation Expense Retained Earnings Accumulated Depreciation Deferred Tax Asset Equipment Deferred Tax Liability / $
Depreciation Expense Accumulated Depreciation Income Tax Expense Retained Earnings Deferred Tax Liability Deferred Tax Asset Equipment / $
Retained Earnings Equipment Accumulated Depreciation Depreciation Expense Deferred Tax Asset Income Tax Expense Deferred Tax Liability / $
Question 25
At January 1, 2012, Beilder Company reported retained earnings of $1,955,500. In 2012, Beilder discovered that 2011 depreciation expense was understated by $438,400. In 2012, net income was $854,630 and dividends declared were $228,600. The tax rate is 37%. Complete the 2012 retained earnings statement for Beilder Company.(List amounts from largest to smallest eg 10, 5, 3, 2.)
BEIDLER COMPANY
Retained Earnings Statement
December 31, 2012 For the Year Ended December 31, 2012
Retained earnings, January 1, as previously reported Retained earnings, January 1, as adjusted Net income Retained Earnings, December 31 Correction of depreciation error, net of tax Depreciation expense Dividends Accumulated depreciation Equipment / $
Less Add : Depreciation expense Accumulated depreciation Correction of depreciation error, net of tax Retained Earnings, December 31 Dividends Equipment Retained earnings, January 1, as previously reported Retained earnings, January 1, as adjusted Net income /
Correction of depreciation error, net of tax Net income Equipment Retained earnings, January 1, as adjusted Retained earnings, January 1, as previously reported Depreciation expense Dividends Accumulated depreciation Retained Earnings, December 31 /
Less Add : Equipment Dividends Accumulated depreciation Net income Retained earnings, January 1, as adjusted Depreciation expense Retained earnings, January 1, as previously reported Correction of depreciation error, net of tax Retained Earnings, December 31 /
Less Add : Dividends Depreciation expense Accumulated depreciation Retained earnings, January 1, as previously reported Retained earnings, January 1, as adjusted Correction of depreciation error, net of tax Net income Retained Earnings, December 31 Equipment /
Equipment Retained Earnings, December 31 Retained earnings, January 1, as previously reported Retained earnings, January 1, as adjusted Net income Dividends Correction of depreciation error, net of tax Depreciation expense Accumulated depreciation / $
/
Question 26
Simmons Corporation owns stock of Armstrong, Inc. Prior to 2012, the investment was accounted for using the equity method. In early 2012, Simmons sold part of its investment in Armstrong, and began using the fair value method. In 2012, Armstrong earned net income of $79,100 and paid dividends of $96,900. Prepare Simmons's entries related to Armstrong's net income and dividends, assuming Simmons now owns 11% of Armstrong's stock.(For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)
Description / Debit / CreditRealized Gain Unrealized Holding Gain or Loss-Equity Realized Loss Cash Dividend Revenue Equity Investments (AFS) Investment in Armstrong Stock Trading Securities / $
Equity Investments (AFS) Dividend Revenue Realized Gain Trading Securities Realized Loss Unrealized Holding Gain or Loss-Equity Cash Investment in Armstrong Stock / $
Unrealized Holding Gain or Loss-Equity Trading Securities Realized Loss Realized Gain Investment in Armstrong Stock Equity Investments (AFS) Dividend Revenue Cash / $
Question 27
Manno Corporation has the following information available concerning its postretirement benefit plan for 2012.
Service cost / $59,940Interest cost / 64,050
Actual return on plan assets / 28,560
Compute Manno's 2012 postretirement expense.
$
Question 28Ravonette Corporation issued 310 shares of $14 par value common stock and 150 shares of $47 par value preferred stock for a lump sum of $17,500. The common stock has a market price of $23 per share, and the preferred stock has a market price of $97 per share. Prepare the journal entry to record the issuance.(List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2. Round answers to zero decimal places, e.g. 16,210.)
Description/Account / Debit / CreditRetained Earnings Common Stock Paid-in Capital in Excess of Par-Common Cash Preferred Stock Paid-in Capital in Excess of Par-Preferred /
Common Stock Cash Paid-in Capital in Excess of Par-Preferred Paid-in Capital in Excess of Par-Common Retained Earnings Preferred Stock /
Common Stock Cash Paid-in Capital in Excess of Par-Preferred Preferred Stock Paid-in Capital in Excess of Par-Common Retained Earnings /
Preferred Stock Paid-in Capital in Excess of Par-Preferred Cash Common Stock Paid-in Capital in Excess of Par-Common Retained Earnings /
Paid-in Capital in Excess of Par-Preferred Retained Earnings Paid-in Capital in Excess of Par-Common Common Stock Cash Preferred Stock /
Question 29
Garfield Company purchased, as a held-to-maturity investment, $82,200 of the 9%, 8-year bonds of Chester Corporation for $69,950, which provides an 12% return. Prepare Garfield's journal entries for (a) the purchase of the investment and (b) the receipt of annual interest and discount amortization. Assume effective interest amortization is used.(Round answers to zero decimal places, e.g. 25,000. List multiple debit/credit entries from largest to smallest amount, e.g. 10, 5, 2.)
Description/Account / Debit / Credit
(a) / Available-for-Sale Securities Held-to-Maturity Securities Interest Expense Dividend Revenue Cash Interest Revenue /
Held-to-Maturity Securities Dividend Revenue Available-for-Sale Securities Interest Revenue Cash Interest Expense /
(b) / Interest Expense Dividend Revenue Available-for-Sale Securities Cash Held-to-Maturity Securities Interest Revenue /
Available-for-Sale Securities Dividend Revenue Held-to-Maturity Securities Cash Interest Revenue Interest Expense /
Held-to-Maturity Securities Dividend Revenue Available-for-Sale Securities Cash Interest Expense Interest Revenue /
/
Question 30
Clydesdale Corporation has a cumulative temporary difference related to depreciation of $595,400 at December 31, 2012. This difference will reverse as follows: 2013, $49,100; 2014, $258,800; and 2015, $287,500. Enacted tax rates are 34% for 2013 and 2014, and 40% for 2015. Compute the amount Clydesdale should report as a deferred tax liability at December 31, 2012.
$