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4) Presenting consolidated financial statements this year when
statements of individual companies were presented last year is
5) During 2008, a construction company changed from the
completed-contract method to the percentage-of-completion method
for accounting purposes but not for tax purposes. The following lists
include gross profit figures under both methods for the past 3 years:
6) On January 1, 2005, Baden Co. purchased a machine, which was
its only depreciable asset, for $300,000. The machine has a 5-year
life, and no salvage value. Sum-of-the-years'-digits depreciation has
been used for financial statement reporting and the elective straight-
line method for income tax reporting. Effective January 1, 2008, for
financial statement reporting, Baden decided to change to the
straight-line method for depreciation of the machine. Assume that
Baden can justify the change.
7) The deferred tax expense is the
8) A company records an unrealized loss on short-term securities.
This might result in what type of difference and in what type of
deferred income tax?