How will Lahey report these multiple plans in its financial statements
?
Question 22
For 2012, Sampsell Inc. computed its annual postretirement expense a
s $278,680. Sampsell‟s contribution to the plan during 2012 was $185
,750. Prepare Sampsell‟s 2012 entry to record postretirement expense.
Question 23
Wertz Corporation decided at the beginning of 2012 to change from t
he completed-contract method to the percentage-ofcompletion method for financial reporting purposes. The company wil
l continue to use completedcontract method for tax purposes. For years prior to 2012, pretax income under the two methods was as follows: percentage-ofcompletion $143,000, and completedcontract $65,800. The tax rate is 32%. Prepare Wertz‟s 2012 journal e
ntry to record the change in accounting principle.
Question 24
In 2012, Bailey Corporation discovered that equipment purchased on
January 1, 2010, for $50,000 was expensed at that time. The equipme
nt should have been depreciated over 5 years, with no salvage value.
The effective tax rate is 29%. Prepare Hiatt‟s 2012 journal entry to co
rrect the error.
Question 25
At January 1, 2012, Beilder Company reported retained earnings of $
2,027,300. In 2012, Beilder discovered that 2011 depreciation expens
e was understated by $442,300. In 2012, net income was $931,270 an
d dividends declared were $204,310. The tax rate is 38%. Complete th
e 2012 retained earnings statement for Beilder Company.
Question 26
Simmons Corporation owns stock of Armstrong, Inc. Prior to 2012, th
e investment was accounted for using the equity method. In early 201
2, Simmons sold part of its investment in Armstrong, and began using
the fair value method. In 2012, Armstrong earned net income of $81,
100 and paid dividends of $90,400. Prepare Simmons‟s entries related
to Armstrong‟s net income and dividends, assuming Simmons now o
wns 11% of Armstrong‟s stock.
Question 27