effective tax rate is 40%. Compute the amount to be reported as inco
me taxes payable at December 31, 2012.
Question 17
At December 31, 2012, Fell Corporation had a deferred tax liability of
$732,802, resulting from future taxable amounts of $2,155,300 and a
n enacted tax rate of 34%. In May 2013, a new income tax act is signe
d into law that raises the tax rate to 42% for 2013 and future years. Pr
epare the journal entry for Fell to adjust the deferred tax liability.
Question 18
AMR Corporation (parent company of American Airlines) reported th
e following for 2009 (in millions).
Service cost $405
Interest cost on P.B.O 736
Return on plan assets 825
Amortization of service cost 29
Amortization of loss 66
Compute AMR Corporation‟s 2009 pension expense (in millions).
Question 19
For Warren Corporation, yearend plan assets were $2,094,700. At the beginning of the year, plan as
sets were $1,762,400. During the year, contributions to the pension fu
nd were $120,000, and benefits paid were $200,000. Compute Warren
‟s actual return on plan assets.
Question 20
For 2010, Campbell Soup Company had pension expense of $48 milli
on and contributed $296 million to the pension fund. Prepare Campbe
ll Soup Company‟s journal entry to record pension expense and fundi
ng.
Question 21
Lahey Corp. has three defined-benefit pension plans as follows.
Pension Assets
(at Fair Value) Projected Benefit
Obligation
Plan X $637,500 $504,000
Plan Y 902,200 739,900
Plan Z 584,600 713,200