ASSESSMENT CASE PAPER ANALYSIS / TUTORIALOUTLET DOT COM ASSESSMENT CASE PAPER ANALYSIS / TUTORIALOUTLET DO | Page 20

future taxable amount?
A. Service fees collected in advance from customers: taxable when
received,
recognized for financial reporting when earned.
B. Accrued compensation costs for future payments.
C. Straight-line depreciation for financial reporting and accelerated
depreciation for tax
reporting.
D. Investment expenses incurred to obtain tax-exempt income (not tax
deductible).
19. During the current year, Stern Company had pretax accounting
income of $45
million. Stern's only temporary difference for the year was rent
received for the
following year in the amount of $15 million. Stern's taxable income
for the year would
be:
A. $30 million.
B. $60 million.
C. $50 million.
D. $45 million. 6 20. Gotting Company bought a copyright for
$90,000 on January 1, 2012, at which time
the copyright had an estimated useful life of 15 years. On January 5,
2015, the company
determined that the copyright would expire at the end of 2016. How
much should
Gotting record retrospectively as the effect of change?
A. $0.
B. $12,000.
C. $8,000.
D. $14,400. Problems
Information for Problems 1 and 2:
Drake, Inc. has two loans recorded on its books. Loan 1 was obtained
on January 1, Year 1,
and Loan 2 was entered into on January 1, Year 2. Drake’s year end is
December 31. For the
two situations related to the loans below, prepare the appropriate