Which of the followings are examples of hedging?
Both A and B
Which of the following statement is correct regarding the accounting treatment of derivatives?
Firms can use hedge treatment only if they show documentation to prove that the derivative qualifies for hedge treatment
A firm who enters into a future contract to buy oil at a preset price hopes the oil price to
Increase
Which of the following is an example of cash flow hedging?
An interest rate swap to synthetically convert floating rate debt into fixed rate debt.
On March 1, 2022, Jensen Corp. purchased a call option on shares of YTV stock. The contract was for 100 shares at a strike price of $90 per share, with an expiration date of May 31, 2022. The option contract premium was $40. On March 31, a market appraisal estimated the time value of the option to be $30. At what amount would Jensen report as the value of the call option in its March 31, 2022 balance sheet?
30
On March 1, 2022, Hudson Corp. purchased a put option on shares of ICA stock. The contract was for 100 shares at a strike price of $120 per share, with an expiration date of May 31, 2022. The option contract price was $30. On March 31, a market appraisal estimated the time value of the option to be $20. At what amount would Hudson report as the value of the put option in its March 31, 2022 balance sheet?
1020
On February 1, 2022, Price Energy entered into a futures contract to buy 5,000 barrels of oil at $51 per barrel. The contract specified delivery for May 1, 2022. At what amount would Price Energy report for the futures contract in its March 31, 2022 balance sheet?
15,000
What were the employer contributions to the pension plan at the end of 2021?
$210 million
What is CCC’s projected benefit obligation at December 31, 2021?
$164.4 million
What amount of retiree benefits was paid at the end of 2021?
$51 million
Which of the following is not true with regard to pension plans?
A defined contribution pension plan creates a liability for the employer.
Which of the following describes defined benefit pension plans?
The investment risk is borne by the employer.
Johnson Co. has a defined contribution pension plan. What is Johnson’s pension expense for the 2020 income statement?
650,000
If a temporary difference causes taxable income to be less than book income at origin, this will result in
Deferred tax asset
What amount should Shaw-Anderson report as income tax payable?
$218,000
What should Tringali report as its income tax expense for its first year of operations?
$73,675
A company reports pretax accounting income of $34 million and taxable income of $19 million. To make journal entry to record income taxes, you should
Credit deferred tax liability by $3.75 million
Franklin Freightways taxable income ($ in millions) is
$162
GAAP regarding accounting for income taxes requires which of the following procedures?
Computation of deferred tax assets and liabilities based on temporary differences.
A firm who enters into a call option to buy oil at a preset price hopes the oil price to
Increase
Which of the following is an example of fair value hedging?
An interest rate swap to synthetically convert fixed rate debt into floating rate debt.
Which of the followings are examples of derivatives?
All of the above
A firm who enters into a future contract to sell oil at a preset price hopes the oil price to
Decrease
Defined benefit pension plans are used _____ by companies in recent years than before.
Less
