ny), for the year ended December 31, 2008, is $250,000. The income t
ax rate for 2008, as well as for the years 20052007, is 30%. What amount should Baden report as net income for the
year ended December 31, 2008?
A. $154,000
B. $60,000
C. $91,000
D. $175,000
48) Accrued salaries payable of $51,000 were NOT recorded at Dece
mber 31, 2007. Office supplies on hand of $24,000 at December 31, 2
008 were erroneously treated as expense instead of supplies inventory
. Neither of these errors was discovered nor corrected. The effect of th
ese two errors would cause
A. 2007 net income to be overstated $27,000 and 2008 net income to
be understated $24,000.
B. 2008 net income to be understated $75,000 and December 31, 20
08 retained earnings to be understated $24,000.
C. 2007 net income and December 31, 2007 retained earnings to be
understated $51,000 each.
D. 2008 net income and December 31, 2008 retained earnings to be
understated $24,000 each.
49) The estimated life of a building that has been depreciated 30 years
of an originally estimated life of 50 years has been revised to a remai
ning life of 10 years. Based on this information, the accountant should
A. adjust accumulated depreciation to its appropriate balance, throug
h net income, based on a 40year life, and then depreciate the adjusted book value as though the es
timated life had always been 40 years.
B. continue to depreciate the building over the original 50-year life.
C. depreciate the remaining book value over the remaining life of the
asset.
D. adjust accumulated depreciation to its appropriate balance throug
h retained earnings, based on a 40year life, and then depreciate the adjusted book value as though the es
timated life had always been 40 years.