Reference no: EM132726205
Questions -
Q1. AMC will claim a tax credit of $60 million (direct reduction in taxes payable) this year. AMC also believes the likelihood that $60 million, $36 million, or $12 million tax credit will be sustained upon tax audit next year is 25%, 30%, and 45%, respectively. Otherwise, AMC's taxable income is $520 million for the year. The effective tax rate is 25%. What is AMC's associated "Liability - Uncertain tax positions" for the year?
a. $130 million.
b. None of the choices are correct.
c. $24 million.
d. $70 million.
e. $94 million.
Q2. IC Leasing leased electronic equipment to Georgia-Atlantic on January 1, 2021. IC Leasing purchased the equipment from International Machines at a cost of $153,255. Here is the related information:
Lease term 2 years (8 quarters)
Quarterly payments $20,000 at the beginning of each period
Economic life 2 years
Fair value of asset $153,255
Annual implicit rate 5%
What do the lessee's entries include on April 1, 2021?
a. Debit Lease Payable by $20,000
b. Credit Lease Payable by $18,334 and Credit Cash by $20,000
c. Credit Lease Payable by $20,000
d. None of the answers are correct
e. Debit Lease Payable by $18,334 and Credit Cash by $20,000
Q3. Consider the following information about a lease contract: Lease type: Finance lease. Annual lease payments: $100,000 are payable at the beginning of each year. Lease term: 8 years. Lessor's and lessee's interest rate: 12%. Guaranteed residual value by the lessee: $60,000. Estimated residual value at the end of the lease term: $40,000. Determine the lessor's Lease Receivable.
a. 0
b. 564,454
c. 580,609
d. None of the answers.
e. 560,415
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