Multiple Choice Question 76

At the beginning of 2018; Blossom, Inc. had a deferred tax asset of $19000 and a deferred tax liability of $29000. Pre-tax accounting income for 2018 was $1480000 and the enacted tax rate is 40%. The following items are included in Blossoms pre-tax income:

Interest income from municipal bonds	$118000
Accrued warranty costs, estimated to be paid in 2019	$258000
Operating loss carryforward	$188000
Installment sales profit, will be taxed in 2019	$128000
Prepaid rent expense, will be used in 2019	$59000

What is Blossom, Inc.s taxable income for 2018?

$1480000

$2231000

$1715000

$1245000

Multiple Choice Question 91

Meyer & Smith is a full-service technology company. They provide equipment, installation services as well as training. Customers can purchase any product or service separately or as a bundled package. Pharoah Corporation purchased computer equipment, installation and training for a total cost of $149040 on March 15, 2018. Estimated standalone fair values of the equipment, installation and training are $102000, $58800 and $25500 respectively. The journal entry to record the transaction on March 15, 2018 will include a

debit to Unearned Service Revenue of $25500.

credit to Sales Revenue for $149040.

credit to Unearned Service Revenue of $20400.

credit to Service Revenue of $58800.

Multiple Choice Question 102

Carla Vista Construction is constructing an office building under contract for Cannon Company and uses the percentage-of-completion method. The contract calls for progress billings and payments of $1200000 each quarter. The total contract price is $18546000 and Carla Vista estimates total costs of $18150000. Carla Vista estimates that the building will take 3 years to complete, and commences construction on January 2, 2018. At December 31, 2019, Carla Vista Construction estimates that it is 70% complete with the building; however, the estimate of total costs to be incurred has risen to $17650000 due to unanticipated price increases. What is reported in the balance sheet at December 31, 2019 for Carla Vista as the difference between the Construction in Process and the Billings on Construction in Process accounts, and is it a debit or a credit?

Difference between the accounts

Debit/Credit

$5563800

Credit

$3382200

Debit

$2755000

Debit

$3382200

Credit