21) Future tax liability is normally classified as a ________ and income tax payable is classified as a ________ on the balance sheet.
A) current liability; current liability
B) current liability; long-term liability
C) long-term liability; current liability
D) long-term liability; long-term liability
22) Challenger 605 Corporation, whose income tax rate is 35%, has pretax accounting income of $4,850,000 and taxable income of $4,075,000. The entry to record the income tax includes a:
A) debit to Future Tax Asset for $271,250
B) debit to Future Tax Asset for $775,000
C) credit to Future Tax Liability for $271,250
D) credit to Future Tax Liability for $775,000
23) Flexity Corporation, whose income tax rate is 35%, has taxable income of $592,600 and pretax accounting income of $494,000. The entry to record the income tax includes a:
A) debit to Income Tax Expense for $207,410
B) credit to Income Tax Payable for $207,410
C) credit to Income Tax Payable for $172,900
D) debit to Income Tax Payable for $172,900
24) Mitrac Corporation, whose income tax rate is 35%, has pretax accounting income of $636,000 and taxable income of $748,000. The entry to record the income tax includes a:
A) debit to Income Tax Expense for $261,800
B) credit to Income Tax Payable for $222,600
C) debit to Future Tax Asset for $39,200
D) credit to Future Tax Liability for $39,200
25) Mechatronic Bogie Ltd., whose income tax rate is 35%, has taxable income of $482,000 and pretax accounting income of $566,000. The entry to record the income tax includes a:
A) credit to Income Tax Expense for $198,100
B) credit to Income Tax Payable for $168,700
C) credit to Income Tax Payable for $198,100
D) debit to Income Tax Payable for $168,700
26) Automatic Train Company, whose income tax rate is 40%, has taxable income of $856,000 and pretax accounting income of $813,000. The entry to record the income tax includes a:
A) credit to Future Tax Liability for $17,200
B) debit to Future Tax Asset for $17,200
C) credit to Income Tax Payable for $325,200
D) debit to Income Tax Expense for $342,400
27) European Rail Corporation, whose income tax rate is 40%, has taxable income of $815,000 and pretax accounting income of $846,000. The entry to record the income tax includes a:
A) credit to Future Tax Liability for $12,400
B) debit to Future Tax Asset for $12,400
C) debit to Income Tax Expense for $326,000
D) credit to Income Tax Payable for $338,400
28) A statement of shareholders' equity would not include which type of transaction?
A) repurchased shares reacquired by the corporation
B) land exchanged for machinery and equipment
C) cumulative translation adjustment
D) cash dividends declared by the board of directors
29) The financial statement that reports the changes in all categories of equity during the period is called the:
A) statement of income
B) statement of shareholders' equity
C) statement of retained earnings
D) statement of changes in financial position
30) Repurchased share transactions are reported on the:
A) statement of shareholders' equity
B) statement of retained earnings
C) income statement as an extraordinary item
D) income statement as a part of continuing operations