Unit 2 Review Crossword Across Clues Down Clues Puzzle Use the following information to answer the next 3 clues. In 2020 (its first year of operations). ABC generated a net operating loss of S20,000. In 2021. earnings before taxes is $184,300. Assume a tax rate of 21% 18. Tax payable for 2021 is 19. The associated deferred tax account is reduced by in 2021 20. Tax expense for 2021 is 21. XYZ purchased a machine for $400,000 with a useful life of 10 years and no salvage value. XYZ leases the machine to ABC under an operating lease. ABC pays $114,500 in rental payments per year. The lease increases XYZs annual net income by 22. On January 1, ABC signed a 5-year finance lease requiring annual payments of $10,840 beginning immediately. Appropriately discounted at 5%, the PV of lease payments is $49,278. Interest expense accrued on December 31 of the first year is 23. ABC leased a building from XYZ. The lease transfers legal ownership to ABC at lease-end. The present value of lease payments is $275,137 at signing. The useful life of the asset is 10 years and the lease term is 5 years. ABC's amortization expense in year 1 of the lease is Use the following information to answer the next 2 clues. Alease agreement calls for annual payments of $58,979 over a 6-year period (also the asset's useful life). The lease is signed January 1, 20X1 with the first payment due on that date. The interest rate is 8%, and the PV of lease payments is S284.470. The lessor manufactured the asset at a cost of S270,000. 24. In year 20X1, the lease decreases the lessee's net income by 25. In year 20X1, the lease increases the lessor's net income by Use the following information to answer the next 3 clues A company with a DB pension plan had a beginning PBO of S843.000 and beginning Plan Assets of $776,000. Additional information for the current year Service cost of $62,502, plan contributions of $62,800, retiree benefits paid of $92,000 Actual return of 4.6% Interest rate of 6.6% 28. Interest cost is 27. The ending balance in Plan Assets is 28. The ending PBO is 29. At the beginning of the year, ABC has the following balances: deferred tax asset, $23,580; deferred tax liability, S14,500. At the end of the year, ABC has the following balances deferred tax asset $14,920: deferred tax liability, $21.900. Assuming tax payable of 583,860, tax expense is Use the following information to answer the next 3 clues. At the end of 2021. ABC paid $81,000 in advance for the 3-year lease of a building during years 2022-2024. Taxable income in 2021 is $302.570 and the tax rate applicable to all years is 30%. 30. Pretax accounting income in 2021 is 31. Tax expense in 2021 is 32. The balance of the associated deferred tax account at the end of 2022 is 33. In its first year of operations, ABC created a DTA of $543,118. ABC determines that it is more likely than not that only 35% of the DTA will be realized. In creating a valuation allowance for the DTA, net income decreases by 34. ABC has pretax accounting income of $30.840. ABC's depreciation for tax purposes was $32.540 while depreciation for financial reporting was $12.990. ABC accrued warranty expense of $19,770 while cash paid to honor existing warranties totales $15,470 Taxable income is Across Clues Puzzle > Unit 2 Review Crossword Across Clues Down Clues Puzzle Use the following information to answer the next 3 clues. In 2020 (its first year of operations). ABC generated a net operating loss of S20,000. In 2021. earnings before taxes is $184,300. Assume a tax rate of 21% 18. Tax payable for 2021 is 19. The associated deferred tax account is reduced by in 2021 20. Tax expense for 2021 is 21. XYZ purchased a machine for $400,000 with a useful life of 10 years and no salvage value. XYZ leases the machine to ABC under an operating lease. ABC pays $114,500 in rental payments per year. The lease increases XYZs annual net income by 22. On January 1, ABC signed a 5-year finance lease requiring annual payments of $10,840 beginning immediately. Appropriately discounted at 5%, the PV of lease payments is $49,278. Interest expense accrued on December 31 of the first year is 23. ABC leased a building from XYZ. The lease transfers legal ownership to ABC at lease-end. The present value of lease payments is $275,137 at signing. The useful life of the asset is 10 years and the lease term is 5 years. ABC's amortization expense in year 1 of the lease is Use the following information to answer the next 2 clues. Alease agreement calls for annual payments of $58,979 over a 6-year period (also the asset's useful life). The lease is signed January 1, 20X1 with the first payment due on that date. The interest rate is 8%, and the PV of lease payments is S284.470. The lessor manufactured the asset at a cost of S270,000. 24. In year 20X1, the lease decreases the lessee's net income by 25. In year 20X1, the lease increases the lessor's net income by Use the following information to answer the next 3 clues A company with a DB pension plan had a beginning PBO of S843.000 and beginning Plan Assets of $776,000. Additional information for the current year Service cost of $62,502, plan contributions of $62,800, retiree benefits paid of $92,000 Actual return of 4.6% Interest rate of 6.6% 28. Interest cost is 27. The ending balance in Plan Assets is 28. The ending PBO is 29. At the beginning of the year, ABC has the following balances: deferred tax asset, $23,580; deferred tax liability, S14,500. At the end of the year, ABC has the following balances deferred tax asset $14,920: deferred tax liability, $21.900. Assuming tax payable of 583,860, tax expense is Use the following information to answer the next 3 clues. At the end of 2021. ABC paid $81,000 in advance for the 3-year lease of a building during years 2022-2024. Taxable income in 2021 is $302.570 and the tax rate applicable to all years is 30%. 30. Pretax accounting income in 2021 is 31. Tax expense in 2021 is 32. The balance of the associated deferred tax account at the end of 2022 is 33. In its first year of operations, ABC created a DTA of $543,118. ABC determines that it is more likely than not that only 35% of the DTA will be realized. In creating a valuation allowance for the DTA, net income decreases by 34. ABC has pretax accounting income of $30.840. ABC's depreciation for tax purposes was $32.540 while depreciation for financial reporting was $12.990. ABC accrued warranty expense of $19,770 while cash paid to honor existing warranties totales $15,470 Taxable income is Across Clues Puzzle >