8.5.2

Question 2 1 pts A reconciliation of Goldfine Corporation pretax accounting income with its taxable income for 2021, its first year of operations, is as follows: Pretax accounting income $4,500,000 Excess tax depreciation ($225,000) Taxable income $4,275,000 The excess tax depreciation will result in equal net taxable amounts in each of the next four years. Enacted tax rates are 30% in 2021, 25% in 2022 and 2023, and 20% in 2024 and 2025. The total deferred tax liability to reported on Goldfine's balance sheet at December 31, 2021 is: Question 3 1 pts Compute Pretax financial income for 2020: 100,000 Depreciation recorded on the tax return that exceeded depreciation on the financial statement: Interest on Municipal Bonds Rent collected on January 1, 2020 for years 2020 through 2022 Income Taxes Payable on the 2020 Financial Statements 20,000 60,000 160,000 Tax Rate for 2020 20% Tax Rate for 2021 25% Note: Rent is recorded on the financial statements on the accrual basis, and recorded on the tax return as cash basis. Question 4 1 pts Compute Pension Expense Service Cost 45,000 Balance of PBO at beginning of year 70,000 Return on Plan Assets 25,000 Amortization of Prior Service Cost 13,000 Amortization of Net Loss 1,800 Settlement Rate 12% Question 6 1 pts Compute the adjustment to Other Comprehensive Income: Projected Benefit Obligation 1/1/2020 4,437,000 Plan Assets 1/1/2020 4,130,000 Settlement Rate 10% Service Cost 150,000 Contributions to the Plan 240,000 Benefits Paid 195,000 Actual Return on Plan Assets 247,800 Expected Rate of Return 8% The adjustment will be a (Debit/Credit) Debit of to Other Comprehensive Income. Question 7 1 pts On December 31, 2021, Labovitz, Inc. leased machinery with a fair value of $1,575,000 from Darland Co. The agreement is a six-year noncancelable lease requiring annual payments of $300,000 beginning December 31, 2021. The lease is appropriately accounted for by Burton as a finance lease. Burton's incremental borrowing rate is 11%. Burton knows the interest rate implicit in the lease payments is 10% The present value of an annuity due of 1 for 6 years at 10% is 4.7908. The present value of an ordinary annuity of 1 for 6 years at 10% is 4.3552. The present value of an annuity due of 1 for 6 years at 11% is 4.6959. The present value of an ordinary annuity of 1 for 6 years at 11% is 4.2305. On December 31, 2021, Labovitz should report a lease liability of: Question 8 1 pts Lake Superior Brewing Corporation (LSBC) leased an asset from Bent Paddle Brewing Company costing $335,000 on December 31, 2020. $335,000 is the fair value of the leased equipment. LSBC will record this as a finance lease. The implicit borrowing rate is 12%. The present value of an ordinary annuity of 1 for 8 years at 12% is 4.96764 The present value of an annuity due of 1 for 8 years at 12% is 5.56376 The first payment was made on the first day of the lease. The lease requires 8 annual payments. What amount of interest expense does Lake Superior Brewing Corporation record for 2021? (round to a whole number)