Intermediate Accounting, 10 Ed
10th Edition
ISBN: 9781260310177
Author: Mark W. Nelson, Wayne B. Thomas J. David Spiceland
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 20, Problem 20.15Q
To determine
Correction of Accounting Errors:
Correcting the errors caused by transaction that was recorded incorrectly or omitted the whole transaction.
To rectify: The transaction, Insurance for 5 years, recorded as insurance expense two years ago with an amount of $50,000.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
What is a deductible?
A) the maximum amount a policy will pay out in any one year
B) the amount paid after the deductible has been satisfied and until the out of pocket maximum has been reached
C) the amount paid by the policyholder before the insurance policy starts paying on the claim
D) the amount paid by the policyholder to the insurer on a regular basis for the policy
Tax-deferred annuities pay no taxes on the income placed into the account but then pay taxes on all the money when it its withdrawn. Nondeferred plans pay taxes on the income prior to depositing
the money into the account and then only pay taxes on the interest earned by the account. Given the amount set aside in an ordinary annuity each month, the current tax rate, the number of years
that contributions will be made to the annuity, and the tax rate when withdraws from the annuity are made, complete parts a through c
Current Tax
Rate
20%
Monthly Number of Annual Interest
Payment Years
$600
35
Rate
2.9%
Future Tax
Rate
35%
a. Find the value of the tax-deferred and the nondeferred accounts
The future value of the tax-deferred account is $
account is $
The future value of the nondeferred
(Round to the nearest cent as needed.)
Om
Hw.39.
Insurance payment includes an advance payment of $12,925 for the next year. Is it tax deductible?
Chapter 20 Solutions
Intermediate Accounting, 10 Ed
Ch. 20 - Prob. 20.1QCh. 20 - There are three basic accounting approaches to...Ch. 20 - Prob. 20.3QCh. 20 - Lynch Corporation changes from the...Ch. 20 - Sugarbaker Designs Inc. changed from the FIFO...Ch. 20 - Most changes in accounting principles are recorded...Ch. 20 - Southeast Steel, Inc., changed from the FIFO...Ch. 20 - Prob. 20.8QCh. 20 - Its not easy sometimes to distinguish between a...Ch. 20 - For financial reporting, a reporting entity can be...
Ch. 20 - Prob. 20.11QCh. 20 - Describe the process of correcting an error when...Ch. 20 - Prob. 20.13QCh. 20 - If it is discovered that an extraordinary repair...Ch. 20 - Prob. 20.15QCh. 20 - Prob. 20.5ECh. 20 - FASB codification research LO202 Access the FASB...Ch. 20 - Classifying accounting changes LO201 through...Ch. 20 - Classifying accounting changes and errors LO201...Ch. 20 - Prob. 20.3DMPCh. 20 - Analysis Case 204 Change in inventory methods;...Ch. 20 - Prob. 20.11DMP
Knowledge Booster
Similar questions
- On a 2021 tax return, how, if at all, would you recover the cost you pay for a noncompete agreement (or “covenant not to compete”) in the context of your pur-chase of all of the assets of a going-concern accounting practice? (a) Straightline amortization over the covenant’s term. (b) Straightline amortization over 15 years (180 months). (c) Straightline amortization over the shorter of (a) or (b). (d) Straightline amortization over the longer of (a) or (b). (e) Section 179 “expensing.” (f) None of the above statements is true.arrow_forwardConsider the following accounts and determine if the account is a current liability, a noncurrent liability, or neither. A. cash B. federal income tax payable this year C. long-term note payable D. current portion of a long-term note payable E. note payable due in four years F. interest expense G. state income taxarrow_forwardOn October 1, 2020, how much should TRUE recognize as gain or loss on extinguishment? (please put a minus (-) sign before your answer if it's a loss, if a gain leave it as is) * How much should TRUE recognize as interest expense for the year ended, December 31, 2021? *arrow_forward
- A taxpayer is itemizing their return and they're trying to calculate the deductible amount of state income taxes paid. They have $4,000 from their Form(s) W-2 and they paid an outstanding balance in the current year for the prior year's balance of $2,500. What is the total amount of Line 5 income taxes that they can itemize? (Do not consider SALT limitations for this question) 2500 4000 6500arrow_forwardSuppose that in the past year your only deductible expenses were $2000 in mortgage interest and $5000 in charitable contributions. If you are entitled to a standard deduction of $6100, then the maximum total deduction you can claim is how much? Choose the correct answer below. O A. $6100, because that is the sum of the deductible expenses O B. $6100, because that is the standard deduction OC. $7000, because that is the sum of the deductible expenses O D. $13,100, because that is the sum of the deductible expenses and the standard deduction O E. S7000, because that is the product of the deductible expenses O F. $13,100, because that is the product of the deductible expenses and the standard deductionarrow_forwardSheridan Inc. reports the following pretax income (loss) for both book and tax purposes. Pretax Year Income (Loss) $120,000 2023 2024 89,000 2025 (87,000) 2026 120,000 Tax Rate 20% 20% 25% 25% The tax rates listed were all enacted by the beginning of 2023.arrow_forward
- LO.2 In 2019, the taxpayer became ineligible to use the cash method of accounting. At the beginning of the year, accounts receivable totaled 240,000, accounts payable for merchandise totaled 80,000, and the inventory on hand totaled 320,000. What is the amount of the adjustment due to the change in accounting method?arrow_forwardA resident citizen has the following data for a taxable year: Ordinary income P300,000 Ordinary loss 50,000 Interest income on bank deposit 10,000 Capital gains (Assets held for 6 months) 20,000 Capital gains (Assets held for 3 years) Capital loss (Assets held for 7 months) 30,000 40,000 Determine the amount of taxable net income.arrow_forward17. Recovery of bad debt written off by a taxpayer: 1) P20,000 from accounts written off in a year which had a net income of P200,000 before the write-off (write-dff for the year was P20,000) 2) P5,000 from accounts written off in a year which had a net loss before written off in a year, which had a net loss before write off of P36,000 (write-off for the year was P5,000). The income from the bad debt recovery is: a. PO b. P20,000 c. P25,000arrow_forward
- With respect to RRSP contributions, which of the following statements is correct? A) Contributions made during the current year and within 30 days of the end of the current year, must be deducted in the current year. B) Contributions in excess of available deduction room cannot be deducted in the current year or in any subsequent year. C) There is no penalty for making contributions that are in excess of available deduction room. D) Contributions made during the current year can be deducted in any subsequent yeararrow_forward1. Firm B uses the calendar taxable year and the cash method of accounting. On December 31, 20x6, Firm B made certain cash payments. To what extent can it deduct the payment in 20x6? (Please note: payments for assets to be consumed in the following year are fully deductible in the 12 months or less and is consumed by the end of the following year.) year of payment if the expenditure results in a benefit with a duration of a) $3,000 compensation to a consultant who spent three weeks in January 20x7 analyzing B's internal control system. b) $500,000 to purchase a new piece of commercial real estate. The equipment was delivered on January 8, 20x7 and has a useful life of 40 years. c) $16,900 property tax to the local government for the first six months of 20x7. d) $50,000 for a two-year lease beginning on February 1, 20x7.arrow_forwardConsider the following accounts and determine if the account is a current liability, a noncurrent liability, or neither. A. Cash B. Federal income tax payable this year C. Long-term note payable D. Current portion of a long-term note payable E. Note Payable due in four years F. Interest Expense G. State income taxarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College