Alice309: please give me a quote on reviewing my answers in the Bold print. Also, I need question twelve worked out.

Question 1 (3 points)

The vested benefits of an employee in a pension plan represent benefits:

A. To be paid to the retired employee in the current year.

B. To be paid to the retired employee in the subsequent years.

C. To be paid from funds currently in the hands of an independentn trustee.

D. That are not contingent on the employees continuing in the service of the employer.

Question 2 (3 points)

The following information relates to the defined benefit pension plan of the Blue Cloud Company for the year ending December 31, 2013:

Projected benefit obligation, January 1	$4,600,000
Projected benefit obligation, December 31	4,729,000
Fair value of pension plan assets, January 1	5,035,000
Fair value of pension plan assets, December 31	5,565,000
Expected return on plan assets	450,000
Amortization of deferred gain	32,500
Employer contributions	425,000
Benefits paid to retirees	390,000
Settlement interest rate	11%

Determine the actual return on the pension fund for the year is:

A. $105,000

B. $495,000

C. $503,500

D. $530,000

Question 3 (3 points)

The sources of differences between pretax financial income and taxable income in the curret year are:

A. Permanent differences and temporary differences

B. Permanent differences only

C. Temporary differences only

D. Operating loss carrybacks and carryforwards

Question 4 (3 points)

Revenue recognized for financial reporting purposes that will never be taxable is:

A. A temporary difference

B. A permanent difference

C. Either a temporary difference or a permanent difference

D. An example of tax fraud

Question 5 (3 points)

In 2011, the first year of operations, Rowe Company reported pretax financial income of $15,000 and taxable income of $11,000. The difference was due to a difference in depreciation for financial reporting and income tax purposes. The difference will reverse in the future as taxable income exceeds financial income by $800 in 2012, $2,000 in 2013, and $1,200 in 2014. The tax rate for the current year is 30%, and no change has been enacted for future years. The amount of income tax expense and deferred tax liability at the end of 2011 is:

A. Income Tax Expense: $4,500 Deferred Tax Liability: $1,200

B. Income Tax Expense: $3,300 Deferred Tax Liability: $4,500

C. Income Tax Expense: $3,300 Deferred Tax Liability: $1,200

D. Income Tax Expense: $4,500 Deferred Tax Liability: $3,300

Question 6 (3 points)

Which of the following is not an example of a permanent difference between pretax financial income and taxable income?

A. Interest earned on tax exempt municipal bonds is included in pretax financial income

B. Straight-line depreciation is expensed for financial accounting purposes but accelerated depreciation is used for income tax purposes

C. Fines related to the violation of law

D. All of these are permanent differences between pretax financial income and taxable income

Question 7 (3 points)

Which of the following would result in a future taxable amount at the time of an originating temporary difference?

A. Prepaid rental income will be included in pretax financial income when earned in a future period.

B. Accelerated depreciation is deducted from income tax purposes and the straight-line method is used for pretax financial income.

C. Interest on municipal bonds

D. None of these items will result in a future taxable amount at the time of the originating temporary difference.

Question 8 (3 points)

An example of a deductible temporary difference creating a deferred tax asset occurs when:

A. The installment sales method is used for income tax purposes, but the accrual method of recognizing sales revenue is used for financial reporting purposes

B. Accelerated depreciation is used for income tax purposes, but straight-line depreciation is used for accounting purposes

C. Warranty expenses are recognized on the accrual basis for financial reporting purposes, but recognized as the warranty conditions are met for income tax purposes

D. The completed-contract method of recognizing construction revenue is used for income tax purposes, but the percentage-of-completion method is used for financial reporting purposes.

Question 9 (3 points)

Recognizing tax benefits in a loss year due to a loss carryforward that will likely be used requires:

A. Only a footnote disclosure

B. Creating a new carryforward for the next year

C. Creating a deferred tax liability

D. Creating a deferred tax asset

Question 10 (3 points)

On the statement of cash flows using the indirect method, an increase in the deferred tax asset would be shown as a(n):

A. Addition to net income

B. Deduction from net income

C. Increase in investing activities

D. Increase in financing activities

Question 11 (3 points)

Jimmy Corporation paid $20,000 in January 2011 for premiums on a two-year life insurance policy which names the company as the beneficiary, an item that is never deductible for income tax purposes. Additionally, Jimmy Corporations financial statements for the year ended December 31, 2011, revealed the company paid $105,000 in nondeductible taxes during the year and also accrued estimated litigation losses of $200,000 which arent deductible until paid for income tax purposes. Assuming the lawsuit was resolved in February 2012 (at which time a $200,000 loss was recognized for income tax purposes) and the Jimmys tax rate is 30 percent for both 2011 and 2012, what amount should Jimmy report as asset for net deferred income taxes on its 2011 balance sheet?

A. $0

B. $57,00

C. $60,000

D. $66,000

Question 12 (3 points)

Panther Company adopted a noncontributory defined benefit pension plan on January 1, 2007. Panther Company uses the benefit/years-of-service method, which results in the following information:

Numbers presented below for the amount funded represent end of the year balances.

2007 2008

Service cost $300,000 $450,000

Amount funded $240,000 $390,000

Discount rate 10% 10%

Expected rate of return 10% 10%

What is the pension expense for the year ended December 31, 2008?

A. $390,000

B. $426,000

C. $456,000

D. $480,000

Question 13 (3 points)

Which of the following is not a component of pension expense?

A. Amount funded

B. Service cost

C. Expected return on plan assets

D. Interest cost

Question 14 (3 points)

If the actual return on pension plan assets in a defined benefit plan exceeds the expected return, how is the difference treated?

A. The difference is recorded as a deferred loss

B. The difference is recorded as a deferred gain

C. The difference is recognized as a loss in the current period

D. The difference is recognized as a gain in the current period

Question 15 (3 points)

When a company adopts a pension plan, how should the prior service costs be treated?

A. They should be charged to retained earnings.

B. They should be charged to operations of prior periods.

C. They should be charged to operating of the current period.

D. They should be charged to operations of current and future periods.

Question 16 (3 points)

The pension expense reported by a company will be increased by interest cost when:

A. Projected benefit obligation exists at the beginning of the year

B. Amounts funded are greater than pension cost accrued

C. Pension plan asset exists at the beginning of the year

D. The plan is fully vested

Question 17 (2 points)

In the computation of pension expense, which of the following components is likely to be negative (i.e., to reduce pension expense)?

A. Service cost

B. Interest cost

C. Amortization of past service cost

D. Amortization of net asset gain