Liablny ard III only 0 The following information related to

Liablny ard III only. ,0. The following information ?\' related to dw ression plan of long, Inc. for 2015. $200,000 82.500 on of prior service cest duue to increase in benciss 150,000 230,000 362.500 on plan Expected return on plan assets on projected benefit obligation 850,000 Pension expense for 2015 is a. $1,245,000 b. $1,215,000 c $1,080,000. d. $1,050,000. 11. In computing the present value of the lease payments, the lessee should a. use its incremental borrowing rate in all cases b. use both its incremental borrowing rate and the implicit rate of the lessor, e implicit rate is known to the lessee. use the implicit rate of the lessor, assuming that the implicit rate is known to 12. A lessee with a finance lease containing a bargain purchase option should depre over the a. asset\'s remaining economic life. b. term of the lease c. life of the asset or the term of the lease, whichever is shorter. d. life of the asset or the term of the lease, whichever is longer. 15

Solution

8)Option B is correct.Type of difference: Temporary, and a deferred tax asset is created

9)Option B is correct. Prepaid expenses that are deducted on the tax return, in the period paid create a deferred tax liability.

10)Pension expense for 2015 is computed below

Pension expense for 2015= $850000+$362500-$230000-$82500+$150000) = $1050000

Option D is correct

11)In computing the present value of lease payments, the lessee should use either the implicit rate or the incremental borrowing rate of the lessor which ever is lower, assuming that the implicit rate is known to the lessee. The options above does not have either rates to be used, but both rates, Option B is correct.

12)A lessee with a finance lease containing a bargain purchase option should depreciate the leased asset over its remaining useful life. Option A is correct