1.
Annual Report: It is a comprehensive financial report that shows all the business activities that takes place throughout the previous financial year. Its purpose is to provide the complete financial information of a company’s financial activities to its users in order to help them analyze and take well informed decisions.
To name: the
2.
To state: the amount of depreciation and amortization expense for the year ending September 29, 2013.
3.
To state: the amount of S Corporation’s additions to property, plant, and equipment during the year ending 2013 and amount of sale proceeds from property, plant, and equipment, if any.
4.
To state: the amount of
5.
Asset turnover is a ratio that measures the productive capacity of the assets to generate the sales revenue for the company. Thus, it shows the relationship between the net sales and the average total assets. The following is the formula to calculate the ratio:
To compare: the asset turnover ratio of S Corporation with G Incorporation.
Want to see the full answer?
Check out a sample textbook solutionChapter 9 Solutions
Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
- Starbucks The financial statements of Starbucks Corporation are presented in Exhibits 1.26-1.28 (see pages 74-77). The income tax note to those financial statements reveals the information regarding income taxes shown in Exhibit 2.18. REQUIRED Starbucks uses the straight-line depreciation method for financial reporting and accelerated depreciation for income tax reporting. Like most firms, the largest deferred tax liability is for property, plant, and equipment (depreciation). Explain how depreciation leads to a deferred tax liability. Suggest possible reasons why the amount of the deferred tax liability related to depreciation increased between 2011 and 2012.arrow_forwardWhich of the following statements about depreciation is not true? a. Depreciation helps companies estimate the cost of doing business b. U.S. tax law permits deductions from taxable income for depreciation c. Depreciable property may be tangible or intangible d. Depreciation is a cash flow that is recognized as an expense to a business.arrow_forward1.1 Zenith Company has a large portion of its plant assets concentrated in an area where technology is changing rapidly. Zenith wants to minimize taxable income and maximize net income reported to sshareholders. Recommend a course of action for Zenith., Support your recommendation. 1.2 Why do many companies use one method to calculate depreciation for the income statement prepared for external reporting and and another method for income tax purposes?arrow_forward
- After preparing a preliminary version of its financial statements, a company found that it made a mistake in computing straight-line depreciation on the books. The company needed to reduce Depreciation Expense on its books by $100,000. Which of the following would be increased by this change? (check all that apply) Deferred Tax Assets Deferred Tax Liabilities Income Tax Payable Income Tax Expense Cash flow from Operationsarrow_forwardJupiter Ltd. follows the straight-line method of depreciation for the year 2014. It shifts to the written-down value method in 2015 and back to the straight-line method in 2016. What accounting concept is being violated? Materiality concept Going concern concept Matching concept Consistency conceptarrow_forwardAnalyzing Coca-Colas Income Tax Disclosures Obtain The Coca-Cola Companys 2017 annual report either using the Investor Relations portion of its website (do a web search for Coca-Cola investor relations) or go to http://www.sec.gov and click Search for company filings under filings and Forms (EDGAR). Required: 1. What was the total income tax expense related to income from continuing operations before income taxes for 2017? How much of this was current? How much was deferred? 2. What were the total gross deferred tax assets at the end of 2017? Total deferred tax liabilities? Net deferred tax liability? 3. How much was the noncurrent deferred tax liability at the end of 2017, and where was it reported? 4. How much were the operating loss carryforwards at the end of 2017? Over what time periods must these be utilized?arrow_forward
- Discuss the difference between the straight-line method of depreciation and the accelerated methods. Why do companies use different depreciation methods for tax reporting and financial reporting?arrow_forwardA company wishes to report the highest earnings possibleaccording to GAAP. Therefore, when calculating depreciation for financial reporting purposes,a. It will follow the MACRS depreciation rates prescribedby the IRS.b. It will estimate the shortest lives possible for itsassets.c. It will estimate the longest lives possible for its assets.d. It will estimate lower residual values for its assets.arrow_forwardAnswer the following questions: Required: a-1. Find the discussion of Property, Plant, and Equipment and depreciation methods used by Campbell's. Use data from the Campbell Soup Company annual report O Straight-line method O Double declining method O Written down value method a-2. Why the particular method is used for the purpose described. Straight-line depreciation is used for financial reporting purposes because depreciation expense will be lower than under any of the accelerated depreciation methods. O Straight-line depreciation is used for financial reporting purposes because depreciation expense will be higher than under any of the accelerated depreciation methods. a-3. What method do you think the company uses for income tax purposes? O Accelerated depreciation using the MACRS rates is probably used for tax purposes to minimize taxes payable. O Straight line Method using the MACRS rates is probably used for tax purposes to minimize taxes payable. Written down value Method using…arrow_forward
- As explained in this chapter, accounting theory allows firms to choose a depreciation method from several equally acceptable alternatives to allocate the cost of a long-term asset to expense over the useful life of the asset. In practice, however, most organizations use the straight-line method of depreciation for financial statement presentation and the Modified Accelerated Cost Recovery System (MACRS) for tax reporting purposes because the Internal Revenue Code allows firms to use an accelerated depreciation method on their tax returns, instead of the straight-line method they report under GAAP. Discuss why a company would choose to use straight-line deprecation for financial reporting purposes and an accelerated method for tax purposes. Speculate on why the tax code might allow firms to accelerate depreciation for investments in productive resources.arrow_forwardThe fact that generally accepted accounting principles allow companies flexibility in choosing between certain allocation methods can make it difficult for a financial analyst to compare periodic performance from firm to firm. Suppose you were a financial analyst trying to compare the performance of two companies. Company A uses the double-declining- balance depreciation method. Company B uses the straight-line method. You have the following information taken from the 12/31/2021 year-end financial statements for Company B: Income Statement Depreciation expense $10,000 Balance Sheet Assets: Plant and equipment, at cost Less: Accumulated depreciation Net $ 200,000 (40,000) $ 160,000 You also determine that all of the assets constituting the plant and equipment of Company B were acquired at the same time, and that all of the $200,000 represents depreciable assets. Also, all of the depreciable assets have the same useful life and residual values are zero. Required: 1. In order to compare…arrow_forward! Required information [The following information applies to the questions displayed below.] Turtle Creek Partnership had the following revenues, expenses, gains, losses, and distributions: Sales revenue Long-term capital gains Cost of goods sold Depreciation-MACRS Amortization of organization costs. Guaranteed payments to partners for general management Cash distributions to partners $ 65,500 $ 4,800 Ordinary income (loss) $ (22,100) $ (7,900) $ (1,240) $ (15,600) $ (3,600) a. Given these items, what is Turtle Creek's ordinary business income (loss) for the year?arrow_forward
- Financial Reporting, Financial Statement Analysis...FinanceISBN:9781285190907Author:James M. Wahlen, Stephen P. Baginski, Mark BradshawPublisher:Cengage LearningCornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage LearningFinancial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage LearningFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,