Question : 81. ABC Company has incurred a period income tax expense of : 1234212

81. ABC Company has incurred a period income tax expense of $500,000. The tax accountants inform the financial accountants that 60% of this value will be paid on March 15th, 2 1/2 months away, while the balance will be paid in 14 1/2 months. The journal entry to recognize these obligations is: 
A. Dec 31   Income Tax Expense                            300,000
              Income Tax Payable                             200,000
                      Cash                                                              500,000
B. Dec 31   Income Tax Expense                            500,000
                      Income Tax Payable – Current                        300,000
                      Income Tax Payable – Non Current                 200,000
C. Dec 31   Income Tax Expense                            500,000
                      Cash                                                              500,000
D. Dec 31   Income Tax Payable                             500,000
                      Income Tax Expense                                      500,000

82. The income before income tax for the first year of operations is $600,000. Because of timing differences in accounting and tax methods, the taxable income for the same year is $450,000. Assuming an income tax rate of 50%, the amount of the deferred income tax would be: 
A. $300,000
B. $75,000
C. $225,000
D. $50,000

83. Which of the following should be reported net of the related income tax effect on the income statement? 
A. Sale of an inventory item at a loss
B. Loss due to theft
C. Loss due to a discontinued operations of the business
D. Sale of a temporary investment at a loss

84. The income before income tax for the first year of operations is $600,000. Because of timing differences in accounting and tax methods, the taxable income for the same year is $450,000. Assuming an income tax rate of 50%, what is the amount of income tax to be reported on the income statement? 
A. $300,000
B. $150,000
C. $75,000
D. $225,000

85. ABC Company has incurred a period income tax expense of $500,000. The tax accountants inform the financial accountants that 60% of this value will be paid on March 15th, 2 1/2 months away, while the balance will be paid in 14 1/2 months. The journal entry to recognize these obligations is: 
A. Dec 31   Income Tax Expense                            300,000
              Income Tax Payable                             200,000
                      Cash                                                              500,000
B. Dec 31   Income Tax Expense                            500,000
                      Income Tax Payable – Current                        300,000
                      Income Tax Payable – Non Current                 200,000
C. Dec 31   Income Tax Expense                            500,000
                      Cash                                                              500,000
D. Dec 31   Income Tax Payable                             500,000
                      Income Tax Expense                                      500,000

86. Which of the following items appears on the corporate income statement before income from continuing operations? 
A. cumulative effect of a change in accounting principles
B. extraordinary items
C. discontinued operations
D. restructuring charges

87. Which of the following is not an event that might cause an asset impairment? 
A. decreases in the market price of fixed assets
B. significant changes in the business or regulations related to fixed assets
C. adverse conditions affecting the use of fixed assets
D. expected cash flow gains from using fixed assets

88. Which of the following would appear as an extraordinary item on the income statement? 
A. loss resulting from the sale of fixed assets
B. gain resulting from the disposal of a segment of the business
C. loss from land condemned for public use
D. liquidating dividend

89. A loss on disposal of a segment would be reported in the income statement as a(n) 
A. administrative expense
B. other expense
C. deduction from income from continuing operations
D. selling expense

90. An extraordinary item results from 
A. a segment of the business being sold
B. corporate income tax being paid
C. a change from one accounting method to another acceptable accounting method
D. a transaction or event that is unusual and occurs infrequently.