Intermediate Accounting III - D105 – WGU Exam Questions
AND Correct Answers
A company had pretax accounting income of $1,500,000.
The company had the following data:
Income from exempt municipal bonds: $70,000
Depreciation for tax purposes in excess of depreciation for
financial statement purposes: $110,000
Estimated federal income tax payments: $200,000
Enacted corporate income tax rate: 20%
What is the credit to federal income tax liability as the result
of these transactions?
$64,000
$78,000
$86,000
$100,000 - ✔✔$64,000
A company has securities which they intend to hold until their
maturity dates.
Which valuation should be used to record these securities?
Cost
Fair value
, Amortized cost
Net realizable value - ✔✔Amortized Cost
A company reported its investments in trading securities on
its December 31, Year 1 balance sheet. The original cost of the
trading securities was $500,000, with a fair value of $475,000.
On December 31, Year 2, the fair value of the securities was
$467,500.
Which amount should the company report on its Year 2
income statement as a result of the decrease in fair value of
the investments at the end of Year 2?
Unrealized loss of $7,500
Realized loss of $7,500
Unrealized loss of $32,500
Realized loss of $32,500 - ✔✔Unrealized loss of $7,500
What does a deferred tax liability represent?
Future tax expense
Future tax liability
Future tax benefit
Future taxable amount - ✔✔Future Tax Liability
AND Correct Answers
A company had pretax accounting income of $1,500,000.
The company had the following data:
Income from exempt municipal bonds: $70,000
Depreciation for tax purposes in excess of depreciation for
financial statement purposes: $110,000
Estimated federal income tax payments: $200,000
Enacted corporate income tax rate: 20%
What is the credit to federal income tax liability as the result
of these transactions?
$64,000
$78,000
$86,000
$100,000 - ✔✔$64,000
A company has securities which they intend to hold until their
maturity dates.
Which valuation should be used to record these securities?
Cost
Fair value
, Amortized cost
Net realizable value - ✔✔Amortized Cost
A company reported its investments in trading securities on
its December 31, Year 1 balance sheet. The original cost of the
trading securities was $500,000, with a fair value of $475,000.
On December 31, Year 2, the fair value of the securities was
$467,500.
Which amount should the company report on its Year 2
income statement as a result of the decrease in fair value of
the investments at the end of Year 2?
Unrealized loss of $7,500
Realized loss of $7,500
Unrealized loss of $32,500
Realized loss of $32,500 - ✔✔Unrealized loss of $7,500
What does a deferred tax liability represent?
Future tax expense
Future tax liability
Future tax benefit
Future taxable amount - ✔✔Future Tax Liability
