Assignment 1 Question 2

[johny...@hotmail.com]

Hi,

I want to make sure i'm interpreting Question 2 correctly.

- Collection of long-term receivables $250,000. Do we increase taxable
income by $250,000?

- There was $100,000 of new long-term receivables at the end of the
year. Do we deduct taxable income by $100,000?

Thanks,
John

[Katherine]

Hi, I'm having issues with this one too, I believe the $250K is now in
the income, so don't do anything with it, but $100K was included but
not tax deductable so don't include it.

My questions is what anyone did with the warranty liabilities? I'm
confused on that... Thanks!

On Jul 4, 9:49 pm, "johnyoo...@hotmail.com" <johnyoo...@hotmail.com>
wrote:

[Jeff & Renee Renaud]

I have added back the $250,000 because the question mentions that LT
receivables are taxable when received. I'm thinking that they are all
received because there is $92,500 left in deferred income tax account still.
The $100,000 should be taken out of income because they are new receivables
and only taxable when received. Not sure if this is right.

The warranty liabilities I added $56,000 and subtracted because they are to
be reversed from the deferred income tax and recognized when paid. As well
I subtracted $32,000 to be included in income tax deferred for this year
until they are paid out next year.

Hope that helps. Let me know what you think.

Renee

[Helene Lapierre]

Yes you add back the 250,000 and deduct the 100,000

[eytan cerasi]

for A/R tax basis is 0 and acc. basiis is 100,000 which makes the future income tax (40,000) and with the opening balance of (92,000) adjustment becomes 52,500.

for warranty again ta basis 0, acc, basis (32,000) FIT 12,800; with the opening balance of 11,840 adjustment is 960

[KevinM]

That is what I did - 960 adjustment for warranty due to difference in
tax rate

On Jul 11, 10:02 pm, eytan cerasi <ecer...@gmail.com> wrote:
> for A/R tax basis is 0 and acc. basiis is 100,000 which makes the future
> income tax (40,000) and with the opening balance of (92,000) adjustment
> becomes 52,500.
>
> for warranty again ta basis 0, acc, basis (32,000) FIT 12,800; with the
> opening balance of 11,840 adjustment is 960
>
> On Mon, Jul 11, 2011 at 5:24 PM, Helene Lapierre

> <lenny.lapie...@gmail.com>wrote:

>
>
>
> > Yes you add back the 250,000 and deduct the 100,000
>

> > On Mon, Jul 4, 2011 at 9:49 PM, johnyoo...@hotmail.com <
> > johnyoo...@hotmail.com> wrote:
>
> >> Hi,
>
> >> I want to make sure i'm interpreting Question 2 correctly.
>
> >> - Collection of long-term receivables $250,000. Do we increase taxable
> >> income by $250,000?
>
> >> - There was $100,000 of new long-term receivables at the end of the
> >> year. Do we deduct taxable income by $100,000?
>
> >> Thanks,

> >> John- Hide quoted text -
>
> - Show quoted text -

[Irina Silvestrova]

Agree
 

> Date: Mon, 11 Jul 2011 19:09:49 -0700

> Subject: Re: Assignment 1 Question 2

> From: kevinma...@rogers.com
> To: fa4-sum...@googlegroups.com

[Jeff & Renee Renaud]

Do we need to reduce the warranty claim as well? DR Warranty liability CR
?????

-----Original Message-----
From: fa4-sum...@googlegroups.com
[mailto:fa4-sum...@googlegroups.com] On Behalf Of KevinM
Sent: July-11-11 10:10 PM
To: FA4 Summer 2011

Subject: Re: Assignment 1 Question 2

[Katherine]

I'd like to re-read or go over examples why people are approaching the
question the way they are, I really want to understand this rather
than just blindly following. If anyone can help, I'd really appreciate
that. I'm a bit confused.

> > - Show quoted text -- Hide quoted text -