Reference no: EM132560283
Question - Melissa Corporation is domiciled in Germany and is listed on both the Frankfurt and New York Stock Exchanges. Melissa has chosen to prepare consolidated financial statements in accordance with U.S. GAAP for filing with the U.S. Securities and Exchange Commission but must also prepare consolidated financial statements in accordance with IFRS in accordance with European Union regulations.
On December 31, 2017, Melissa Corporation purchased a small office building for $1,380,000. For tax and financial reporting purposes, Melissa estimates that the building has a useful life of 40 years with an estimated residual value of $100,000. Melissa uses straight-line depreciation for financial reporting. Assume that, for tax purposes, Melissa is permitted to deduct 5% of an asset's depreciable base in the first year. This is the only building that Melissa owns.
At the end of 2018, Melissa had the building appraised by a qualified real estate appraiser who estimated the fair value of the building was $1,172,500. Melissa intends to occupy the building itself, and therefore, the building is classified as property, plant, and equipment under both U.S. GAAP and IFRS. After being revalued under IFRS, the Building account has a balance of $1,172,500 and the Accumulated depreciation account has a balance of zero. Assume Melissa will have sufficient income in the future to recover any deferred tax assets that might be recognized.
U.S. GAAPIFRS Model used for subsequent measurement Cost Revalued at fair value Pre-tax income before depreciation and revaluation charge $500,000 $500,000 Enacted tax rate* 35% 35%
*We are assuming, for simplicity, that the relevant tax rate is 35% for all jurisdictions where Melissa is required to pay income tax. No new tax laws are substantively enacted at December 31, 2017.
Required -
1. Calculate Melissa's taxable income in 2018.
2. Prepare the journal entry to record Melissa's 2018 income tax activity under U.S. GAAP.
3. Prepare the journal entry to record Melissa's 2018 income tax activity under IFRS.
|
Represent an increase and a negative number
: Jane currently has $4,800 in her savings account and $2,000 in her checking account at the local bank.
|
|
Health problems or issues currently impacting your community
: What are the health problems or issues currently impacting your community? How do you plan to assist in prevention and intervention programs of your community.
|
|
Define components of it strategic plan in retail industry
: Evaluate information Technology strategic planning process in the retail industry. Components of IT strategic plan in the retail industry.
|
|
What is the amount of the ending capital balance
: Tarr, a sole proprietorship, had the following balances and transactions during 2017: beginning capital, $40,000; What is the amount of ending capital balance
|
|
Prepare the journal entry to record melissa income tax
: On December 31, 2017, Melissa Corporation purchased a small office building for $1,380,000. Prepare the journal entry to record Melissa income tax
|
|
Describe the need for high availability and redundancy
: Recommend a configuration for shared storage; make sure to discuss the need for high availability and redundancy for virtualization for the organization.
|
|
Environmental literacy plan final
: Discuss ways to live more sustainably. Create a sustainable community. What does a sustainable community look like?
|
|
Discuss the travel industry using data mining applications
: As noted by Efraim (2020), data mining has become a popular tool in addressing many complex business problems and opportunities.
|
|
How knowledge or skills of cloud computing have been applied
: Provide a reflection of at least 500 words (or 2 pages double spaced) of how the knowledge, skills, or theories of Cloud Computing have been applied.
|