accountingperiodsandmethods(编辑修改稿)

accountingperiodsandmethods(编辑修改稿)内容摘要：

,000  12/3). The tax on $60,000 is: $50,000  15% = $ 7,500 $10,000  25% = 2,500 $10,000 To convert to the tax liability for 2 months, the following calculation is made: $10,000  3/12 = $2,500 PTS: 1 DIF: 1 REF: p. 167 | p. 168 OBJ: 1 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 5 min 12. In 2020, T Corporation changed its tax year from ending each September 30th to ending each December 31st. The corporation earned $25,000 during the period October 1, 2020 through December 31, 2020. The tax on the annualized ine for the short period will be greater than the tax on $25,000 when the tax rates are progressive. Accounting Periods and Methods 167 ANS: T The annualized ine will be $100,000 [(12 months/3 months)  $25,000]. The tax on the annualized ine equals 3/12 of the tax on $100,000. With progressive rates, the tax on $100,000 will be greater than 4 times the tax on $25,000. PTS: 1 DIF: 1 REF: p. 168 OBJ: 1 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 2 min 13. Snow Corporation was a calendar year corporation that sold all of its assets and liquidated as of April 30, 2020. The corporation is not required to annualize its ine for its final year of operations. ANS: T The purpose of annualizing ine is to prevent the taxpayer from taking undue advantage of the progressive tax rate schedule. Annualization is not required in the corporation’s first tax year, nor for its final tax year. PTS: 1 DIF: 1 REF: p. 168 OBJ: 1 NAT: AICPA FNReporting | AACSB Analytic MSC: 2 min 14. Ted, a cash basis taxpayer, received a $100,000 bonus in 2020 when he was in the 35% marginal tax bracket. In 2020, when Ted was in the 28% marginal tax bracket, it was discovered that the bonus was incorrectly puted, and Ted was required to refund $25,000 to his employer. As a result of the refund, Ted can reduce his 2020 tax liability by $8,750 (.35  $25,000). ANS: T Ted recognized ine in a high tax rate year (35%), but was required to refund the ine in a lower tax rate year. Under 167。 1341, Ted is permitted to reduce the 2020 tax liability by the amount of the tax paid in 2020 on an amount that was subsequently determined to not be his ine. PTS: 1 DIF: 1 REF: p. 1610 OBJ: 2 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 5 min 15. A disadvantage to using the accrual method of accounting, as pared to the cash method, is that under the accrual method the ine may be recognized before it is actually collected. ANS: T Under the accrual method, the ine must be recognized when the taxpayer has the right to receive the ine, whether or not the ine has actually been received. PTS: 1 DIF: 1 REF: p. 1613 OBJ: 2 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 2 min 16. A new calendar year, cash basis corporation paid $12,000 for a 12month license on June 30, 2020. The corporation can deduct only $6,000 for the calendar year 2020. ANS: F Under the oneyear rule for prepaid expenses for cash basis taxpayers, the entire $12,000 can be deducted in the year paid. PTS: 1 DIF: 1 REF: p. 1612 OBJ: 2 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 2 min 168 2020 Comprehensive Volume/Test Bank 17. Alice, Inc., an S corporation, operates a retail clothing store and also owns rental property. The sales from the clothing store must be reported by the accrual basis, but the rental ine may be reported by the cash method, unless Alice previously elected the accrual method for rents. ANS: T PTS: 1 DIF: 1 REF: p. 1611 OBJ: 2 NAT: AICPA FNReporting | AACSB Analytic MSC: 2 min 18. If it were not for the allevents requirement, a taxpayer would be permitted to match revenue from a sale with the estimated future costs of servicing goods under a warranty. ANS: F Such an accrual would violate both the allevents and economic performance requirements. PTS: 1 DIF: 1 REF: p. 1613 | p. 1614 OBJ: 2 NAT: AICPA FNReporting | AACSB Analytic MSC: 2 min 19. A C corporation provides office janitorial services to various businesses. The corporation has average annual gross receipts of $2,500,000. The corporation can use the cash method of accounting. ANS: T The C Corporation is providing services, and inventories are not an ine producing factor. Furthermore, the corporation’s average annual gross receipts are less than $5 million. Therefore, the corporation can use the cash method. PTS: 1 DIF: 1 REF: p. 1612 OBJ: 2 NAT: AICPA FNReporting | AACSB Analytic MSC: 2 min 20. Franklin Company began business in 2020 and has consistently used the cash method to report ine from the sale of inventory in ine tax returns filed for 2020 through 2020. As a result of an audit by the IRS, Franklin was required to change to the accrual method of accounting beginning with 2020. The accounts receivable and inventory on hand at the end of 2020 are treated as a positive adjustment to ine and the accounts payable for inventory at the end of 2020 is a negative adjustment to ine. These adjustments result from changing accounting methods and must be included in the 2020 taxable ine. ANS: T The accounts receivable balance and inventory at the end of 2020 are positive 167。 481 adjustments, and the accounts payable for the inventory is a negative 167。 481 adjustment. Since the change in accounting method is involuntary, a positive adjustment must be included in gross ine in the year of the change in accounting method. So the amount of the 167。 481 adjustment is included in 2020 gross ine. PTS: 1 DIF: 1 REF: p. 1618 | p. 1619 OBJ: 3 NAT: AICPA FNReporting | AACSB Analytic MSC: 5 min 21. Sandstone, Inc., has consistently included some factory overhead as a current expense, rather than as a cost of producing goods. As a result, the beginning inventory for 2020 is understated。