Advanced Accounting
12th Edition
ISBN: 9781305084858
Author: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Publisher: Cengage Learning
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Chapter 12, Problem 1.3E
To determine
Introduction:
Operating loss occurs when the company’s operating expenses are on a higher side as compared to gross profits.
The reasons for showing an effective tax rate of less than 30% for the first two quarters.
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Cougar’s Accounting Services provides low-cost tax advice and preparation to those with financial need. At the end of the current period, the company reports the following amounts: Assets = $16,200; Liabilities = $13,600; Revenues = $25,200; Expenses = $31,600.
Required:
1. Calculate net loss.
2. Calculate stockholders' equity at the end of the period.
Collect the latest annual report of an ASX listed company for the last 2 financial years. Please read the financial statements (balance sheet, income statement, cash flow statement) and notes attached to financial statements on income tax issues very carefully. Please remember some aspects of your firm’s treatment of its tax – can be a very complicated area, particularly for some firms. Based on your understanding of the topic “accounting for income tax” and based on your reading of the collected annual reports, do the following tasks.
Briefly explain the concepts of temporary difference and permanent difference. Identify any permanent differences that your company may have.
What do you find interesting, confusing, surprising or difficult to understand about the treatment of tax in your firm’s financial statements? What new insights, if any, have you gained about how companies account for income tax as a result of examining your firm’s tax expense in its accounts?
Briefly explain the…
b. Prepare a pro forma balance sheet for next year, using the information given and the judgmental approach. Include a reconciliation of the retained earnings account. ???
NOTE: Taxes payable for last year are about
19.6443%
of last year's taxes on the income statement. The pro forma value is obtained by taking
19.6443%
of next year's taxes.
Complete the assets part of the pro forma balance sheet for next year: (Round to the nearest dollar.)
Pro Forma Balance Sheet
Provincial Imports, Inc.
for Next Year
(Judgmental Method)
Cash
$
Marketable securities
Accounts receivable
Inventories
Total current assets
$
Net fixed assets
Total assets
$
Chapter 12 Solutions
Advanced Accounting
Ch. 12 - Prob. 1UTICh. 12 - Prob. 2UTICh. 12 - Prob. 3UTICh. 12 - Prob. 4UTICh. 12 - Prob. 1.1ECh. 12 - Prob. 1.2ECh. 12 - Prob. 1.3ECh. 12 - Prob. 1.4ECh. 12 - Prob. 1.5ECh. 12 - Prob. 1.6E
Ch. 12 - Prob. 2ECh. 12 - Prob. 3ECh. 12 - Prob. 4.1ECh. 12 - Prob. 4.2ECh. 12 - Prob. 6ECh. 12 - Prob. 7ECh. 12 - Ratable allocation for nonordinary items. Baxter...Ch. 12 - Prob. 9.1ECh. 12 - Prob. 9.2ECh. 12 - Prob. 9.3ECh. 12 - Prob. 10ECh. 12 - Prob. 12.1PCh. 12 - Prob. 12.2PCh. 12 - Prob. 12.3PCh. 12 - Prob. 12.4PCh. 12 - Prob. 12.5PCh. 12 - Prob. 12.6PCh. 12 - Prob. 12.7.1PCh. 12 - Prob. 12.7.2PCh. 12 - Prob. 12.7.3PCh. 12 - Prob. 12.8.1PCh. 12 - Prob. 12.8.2P
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