A reconciliation of Kent Corp.'s 2021 pretax accounting income and taxable income is below: Pretax accounting income $180,000 Permanent differences (15,000) Temporary difference: depreciation (12,000) Taxable income $153,000 Cumulative future taxable amounts, all from temporary differences in depreciation are below: As of December 31, 2020 As of December 31, 2021 S13,000 $25,000 The enacted tax rate is 25% for all years. What income tax expense should Kent report for 2021? Multiple Choice
Q: Lax Company at the end of 2019, its first year of operations, prepared a reconciliation between…
A: Hey, since there are multiple questions posted, we will answer first question. If you want any…
Q: XYZ Co. at the end of 2018, its first year of operations, prepared a reconciliation between pretax…
A: Pretax income: It is generally the income of the entity in which all the expenses, interest and…
Q: the end of 2020, Payne Industries had a deferred tax asset account with a balance of $65 million…
A: Solution 1: Payne Industries Journal Entries Event Particulars Debit (In Million) Credit (In…
Q: 10. Sheridan Corp. prepared the following reconciliation of income per books with income per tax…
A: In order to determine the current provision for income taxes, the income tax rate is required to be…
Q: PRANCER Company, at the end of 2021, its first year of operations, prepared a reconciliation between…
A: Solution: income tax payable to be presented in the statement of financial position at year end =…
Q: In its 2021 income statement, Crane Corp. reported depreciation of $3600000 and interest revenue on…
A: Deferred tax liability is the amount of liability that arises on account of differences in items as…
Q: pretax accounting income
A: Pretax accounting income = Taxable income + Accumulated depreciation for tax purpose - Accumulated…
Q: Sunland Co. at the end of 2020, its first year of operations, prepared a reconciliation between…
A: Income taxes payable = Taxable income * Income tax rate
Q: iken fro Igado Company s 20 Tinancial records! Pretax accounting income- P1,500,000 Accrued warranty…
A: tax rate 2020 - 30% 2021- 32% 2022 - 34% 2023 - 35%
Q: Scarlet Company had pretax accounting income of P2,400,000 during 2020. Scarlet Company’s temporary…
A: Solution Given Pre tax accounting income of 2020 2,400,000 Sales made in 2019 recorded in…
Q: (b) Assuming that it is more likely than not that $13,600 of the deferred tax asset will not be…
A: Deferred Tax Asset is an item which is shown in the balance sheet that reduces the company future…
Q: On January 1, 2021, Sheridan, Inc. purchased a machine for $2180000 which will be depreciated…
A: Solution Concept If in case due to temporary difference The income for tax reporting is less than…
Q: Parker Company identifies depreciation as the only difference for future taxable amounts. In Year 1,…
A: The deferred tax asset or liability is created out of timing difference. There may be some items…
Q: At December 31, 2020 Company B had one temporary difference (related to depreciation) that resulted…
A: Tax is the amount which an individual is liable to pay the government for business operation within…
Q: nancial income P400,000 Estimated litigation expense 1,000,000 Installment sales (800,000)…
A: Income tax refers to the mandatory charge levied by the government over the income gained by an…
Q: The following information is available for Pearl Corporation for 2019 (its first year of…
A: There can be difference in accounting income and taxable income of business due to different…
Q: Evergreen companies 2020 reconciliation between pretax GAAP income and taxable income is as follows.…
A: Temporary differences imply that there would be only timing difference when it is taxable as per tax…
Q: The Garlic Pepper Steak Company had taxable income of P1,200,000 during 2020. Garlic Pepper Steak…
A:
Q: (a) Prepare a table of future taxable and deductible amounts. (b) Prepare the journal entry to…
A:
Q: ABC Company prepared the reconciliation between pretax financial income and taxable income at…
A: Income tax expense (benefit) for the year 2019 = Pretax financial income x Income tax rate
Q: Compute taxable income for 2019. Taxable income $enter Taxable income in dollars (b)…
A: Deferred tax asset is the tax asset which the company has paid in advance to the government during…
Q: Grouper Corp. has a deferred tax asset account with a balance of $71,600 at the end of 2019 due to a…
A: Solution:-a The following journal entry required for record income tax payable, income tax expense…
Q: s of December 31, 2019, its first year of operations, PNR Co. had taxable temporary differences…
A: Step 1 Current tax to be reportable is equal to current tax + Deferred tax liability – Deferred tax…
Q: The following information is available for Pronghorn Corporation for 2019 (its first year of…
A: Solution: Deferred tax is an item on the balance sheet of the entity, for excess payments, advance…
Q: Sunland Co. at the end of 2021, its first year of operations, prepared a reconciliation between…
A: Here depreciation will be future Taxable because it is a Taxable temporary difference here.…
Q: A company prepared the following reconciliation for 2021: Pretax financial income for 2021…
A: Particulars Amount Pretax financial income for 2021 $719000 Originating temporary difference…
Q: PRANCER Company, at the end of 2021, its first year of operations, prepared a reconciliation between…
A: Total income tax = Taxable amount x income tax rate = 250000 x 30% = 75,000
Q: At the beginning of 2019, Norris Company l1ad a deferred tax liability of $6,400, because of the use…
A: Comment-Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the…
Q: 1. Prior to 2020, taxable income and pretax financial income were identical. 2. Pretax financial…
A: Pretax financial income = $1,359,000 Equipment Purchased = $1,260,000 Life = 5 years Depreciation on…
Q: On the 30 June 2021 B Ltd had a balance of $198,000 in its deferred tax liability account and…
A: The accounting profit and taxable profit are different. There are certain events which are…
Q: At 30 June 2019, Beta Ltd had the following deferred tax balances: Deferred tax liability $18,000…
A:
Q: Buffalo Wings Company reports taxable income of P1,658,000 on its income tax return for the year…
A: Solution: Financial income subject to tax = taxable income - Excess book depreciation - Accrual of…
Q: Shwonson Industries reported a deferred tax asset of $7.75 million for the year ended December 31,…
A: Following is the answer to the given questions
Q: As of December 31, 2019, its first year of operations, PNR Co. had taxable temporary differences…
A: Income tax payable = tax rate * taxable income Taxable Income = pre tax income - TTD + DTD TTD=…
Q: he income tax rate is 30% for all years. Income tax payable is?
A: Income Tax is a form of indirect tax. It is the tax payable on the amount of income earned during a…
Q: Buffalo Wings Company reports taxable income of P1,658,000 on its income tax return for the year…
A: taxable income of P1,658,000
Q: Sheridan Co. at the end of 2020, its first year of operations, prepared a reconciliation between…
A: Income taxes payable = taxable income * tax rate
Q: ABC Corporation prepared the following reconciliation for its first year of operations: ·…
A: Current portion and deferred portion of income tax provisions are two types of provisions in…
Q: Ivanhoe Corporation prepared the following reconciliation for its first year of operations: Pretax…
A: Income tax actual paid and income tax expenses some time differ because of deferred income tax.…
Q: PT BCD has a deferred tax asset account with a balance of Rp300.000 at the end of 2018 due to a…
A: Cumulative temporary difference at the end of 2019 = Rp 1.000.000 Tax rate = 40% Deferred tax asset…
Q: Analysis of the assets and liabilities of Beef Brisket Corporation on December 31, 2019 disclosed…
A: Deferred tax liability = temporary difference X enacted tax rates
Q: Clydesdale Corporation has a cumulative temporary difference related to depreciation of $580,000 at…
A: Deferred tax liability: A deferred tax liability occurs when a business has a certain amount of…
Q: Pretax financial income for Lake Inc. is $300,000, and its taxable income is $100,000 for 2021. Its…
A:
Q: Analysis of the assets and liabilities of Beef Brisket Corporation on December 31, 2019 disclosed…
A: Soluiton: Total deferred tax liability at Dec 31, 2019 = Reversible amounts*tax rates
Q: Shwonson Industries reported a deferred tax asset of $5 million for the year ended December 31,…
A: calculate loss on product warranty: Loss on product warranty = Deferred tax liability temporary…
Q: Teal Corp. has a deferred tax asset account with a balance of $73,600 at the end of 2019 due to a…
A:
Q: PRANCER Company, at the end of 2021, its first year of operations, prepared a reconciliation between…
A: Total tax = Taxable amount x income tax rate = 250000 x 30% = 75,000
Q: Pretax financial income for Lake Inc. is $300,000, and its taxable income is $100,000 for 2018. Its…
A: Calculation of Deferred Tax Liability Deferred Tax Liability = Timing Difference * Tax Rate…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- Interperiod Tax Allocation Peterson Company has computed its pretax financial income to be 66,000 in 2019 after including the effects of the appropriate items from the following information: Petersons accountant has prepared the following schedule showing the future taxable and deductible amounts at the end of 2019 for its three temporary differences: At the beginning of 2019, Peterson had a deferred tax liability of 12,540 related to the depreciation difference and 4,710 related to the accrual-basis sales difference. In addition, it had a deferred tax asset of 14,850 related to the warranty difference. The current tax rate is 30%, and no change in the tax rate has been enacted for future years. Required: 1. Compute Petersons taxable income for 2019. 2. Prepare Petersons income tax journal entry for 2019 (assume no valuation allowance is necessary). 3. Next Level Identify the permanent differences in Items 1 through and explain why you did or did not account for them as deferred tax items in Requirement 2.Temporary and Permanent Differences Lin has just completed its first year of operations and has a number of differences between its pretax financial income and taxable income. The differences at the end of 2019 are as follows: a. Lin recorded 7,000 of interest revenue on municipal bonds during 2019. b. 15,000 of accrual-basis sales were recognized in income during 2019. They are expected to be received in cash during January 2020. c. Depreciation on machinery totaled 28,000 using straight-line depreciation for financial statements. Lins tax accountant recorded 36,000 of depreciation on the companys tax return. d. Lin was fined 3,000 for violating certain labor laws during 2019. Lin paid the fine during 2019 and agreed to ensure future violations would not occur. e. Bryant Corporation has agreed to rent space from Lin in 2020. In December 2019, Lin received 7,500 from Bryant in advance for rent. f. For 2019, Lin reported 9,500 of warranty expense on its income statement. The companys warranty liability at the end of 2019 was 6,250. Lin expects additional warranty costs to be paid during 2020. Required: 1. For each item, determine if it results in a temporary or permanent difference. If the item results in a temporary difference, determine if it results in a deferred tax asset or deferred tax liability. 2. For each item, determine if it initially results in pretax financial income being greater than or less than taxable income. 3. Next Level Discuss why permanent differences do not impact future periods taxable income and how these differences affect tax rates.Single Temporary Difference: Multiple Rates At the end of 2019, Fulhage Company reported taxable income of 9,000 and pretax financial income of 10,600. The difference is due to depreciation for tax purposes in excess of depreciation for financial reporting purposes. The income tax rate for the current year is 40%, but Congress has enacted tax rates of 35% for 2020 and 30% for 2021 and beyond. Fulhage has calculated the excess of its financial depreciation over its tax depreciation for future years as follows: 2020, 600; 2021, 700; and 2022, 300. Prior to 2019, the company had no deferred tax liability or asset. Required: Prepare Fulhages income tax journal entry at the end of 2019.
- Multiple Temporary Differences Vickers Company reports taxable income of 4,500 for 2019. Vickers has two temporary differences between pretax financial income and taxable income at the end of 2019. The first difference is expected to result in taxable amounts totaling 2,470 in future years. The second difference is expected to result in deductible amounts totaling 1,360 in future years. Vickers has a deferred tax asset of 372 and a deferred tax liability of 690 at the beginning of 2019. The current tax rate is 30%, and no change in the tax rate has been enacted for future years. Vickers has positive, verifiable evidence of future taxable income. Required: Prepare Vickerss income tax journal entry at the end of 2019.Information for Kent Corp. for the year 2021: Reconciliation of pretax accounting income and taxable income: Pretax accounting income $ 174,000 Permanent differences (15,200 ) 158,800 Temporary difference-depreciation (12,900 ) Taxable income $ 145,900 Cumulative future taxable amounts all from depreciation temporary differences: As of December 31, 2020 $ 12,700 As of December 31, 2021 $ 25,600 The enacted tax rate was 30% for 2020 and thereafter. What would Kent's income tax expense be in the year 2021?Information for Kent Corp. for the year 2021: Reconcillation of pretax accounting income and taxable income: Pretax accounting income $180,000 (15,000) 165,000 (12,000) Permanent differences Temporary difference-depreciation Taxable income $153,000 Cumulative future taxable amounts all from depreciation temporary differences: As of December 31, 2020 $13,000 $25,000 As of December 31, 2021 The enacted tax rate vwas 25% for 2020 and thereafter. What should be the balance in Kent's deferred tax liability account as of December 31, 2021? Multiple Choice Prev 8 of 39 Next > Question no....pages ....pdf 7 Question no....pages MacBook Air
- Subject :- Account At the end of 2024, its first year of operations, Blossom Company prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income $2,890,000 Estimated litigation expense 3890000 Extra depreciation for taxes (5892000) Taxable income $888,000 The estimated litigation expense of $3890000 will be deductible in 2025 when it is expected to be paid. Use of the depreciable assets will result in taxable amounts of $1964000 in each of the next 3 years. The income tax rate is 20% for all years. The deferred tax asset at the end of 2024 to be recognized isXYZ Co. at the end of 2018, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income € 750,000 Estimated expenses deductible for taxes when paid 1,200,000 Extra depreciation (1,350,000) Taxable income € 600,000 Estimated warranty expense of €800,000 will be deductible in 2019, €300,000 in 2020, and €100,000 in 2021. The use of the depreciable assets will result in taxable amounts of €450,000 in each of the next three years. Instructions (a) Prepare a table of future taxable and deductible amounts. (b) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2018, assuming an income tax rate of 40% for all years.The information that follows pertains to Esther Food Products:a. At December 31, 2018, temporary differences were associated with the following future taxable (deductible)amounts:Depreciation $ 60,000Prepaid expenses 17,000Warranty expenses (12,000)b. No temporary differences existed at the beginning of 2018.c. Pretax accounting income was $80,000 and taxable income was $15,000 for the year ended December 31,2018.d. The tax rate is 40%.Required:Determine the amounts necessary to record income taxes for 2018, and prepare the appropriate journal entry.
- XYZ Co. at the end of 2018, its first year of operations, prepared a reconciliation betweenpretax financial income and taxable income as follows:Pretax financial income € 750,000Estimated expenses deductible for taxes when paid 1,200,000Extra depreciation (1,350,000)Taxable income € 600,000Estimated warranty expense of €800,000 will be deductible in 2019, €300,000 in 2020, and€100,000 in 2021. The use of the depreciable assets will result in taxable amounts of €450,000in each of the next three years.Instructions(a) Prepare a table of future taxable and deductible amounts.(b) Prepare the journal entry to record income tax expense, deferred income taxes, andincome taxes payable for 2018, assuming an income tax rate of 40% for all years.1. Pretax accounting income was S70 million and taxable income was $8 million for the year ended December 31, 2021. 2. The difference was due to three items: a. Tax depreciation exceeds book depreciation by $60 million in 2021 for the business complex acquired that year. This amount is scheduled to be $80 million in 2022 and to reverse as ($70 million) and ($70 million) in 2023 and 2024, respectively. b Insurance of $8 millian was paid in 2021 for 2022 coverage C. A $6 million loss contingency was accrued in 2021, to be paid in 2023. 3. No temporary differences existed at the beginning of 2021. 4. The tax rate is 25% Required: 1. Determine the amounts necessary to record income taxes for 2021, and prepare the appropriate journal entry 2. Assume the enacted federal income tax law specifies that the tax rate will change from 25% ta 20% in 2023. When scheduling the reversal of the depreciation difference, you were uncertain as to how to deal with the fact that the difference will continue…Based on the following information, what was the 2018 taxable income for Jin Co. assuming that its pre-tax accounting income for the year ended December 31, 2018 is P230,000. Temporary difference Future taxable (deductible) amount Installment sales --------------- P192,000 Depreciation-------------------- P60,000 Unearned rent-------------------- (P200,000) a. P282,000 b. P178,000 c. P482,000 d. P222,000