Case Development began operations in December 2024. When property is sold on an installment basis, Case recognizes installment income for financial reporting purposes in the year of the sale. For tax purposes, installment income is reported by the installment method. 2024 installment income was $942,000 and will be collected over the next three years. Scheduled collections and enacted tax rates for 2025-2027 are as follows: 2025 $ 330,000 20% 2026 336,000 25 2027 276,000 25 Case also had product warranty costs of $403,000 expensed for financial reporting purposes in 2024. For tax purposes, only the $96,000 of warranty costs actually paid in 2024 was deducted. The remaining $307,000 will be deducted for tax purposes when paid over the next three years as follows: 2025 $ 115,000 2026 100,000 2027 92,000 Pretax accounting income for 2024 was $1,049,000, which includes interest revenue of $29,000 from municipal bonds. The enacted tax rate for 2024 is 20%. Required: Assuming no differences between accounting income and taxable income other than those described above, prepare the appropriate journal entry to record Case's 2024 income taxes. What is Case's 2024 net income?

Case Development began operations in December 2024. When property is sold on an installment basis, Case recognizes installment income for financial reporting purposes in the year of the sale. For tax purposes, installment income is reported by the installment method. 2024 installment income was $942,000 and will be collected over the next three years. Scheduled collections and enacted tax rates for 2025-2027 are as follows: 2025 $ 330,000 20% 2026 336,000 25 2027 276,000 25 Case also had product warranty costs of $403,000 expensed for financial reporting purposes in 2024. For tax purposes, only the $96,000 of warranty costs actually paid in 2024 was deducted. The remaining $307,000 will be deducted for tax purposes when paid over the next three years as follows: 2025 $ 115,000 2026 100,000 2027 92,000 Pretax accounting income for 2024 was $1,049,000, which includes interest revenue of $29,000 from municipal bonds. The enacted tax rate for 2024 is 20%. Required: Assuming no differences between accounting income and taxable income other than those described above, prepare the appropriate journal entry to record Case's 2024 income taxes. What is Case's 2024 net income?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 8E: Incomc Taxes Then Company has been in operation for several years. It has both a deductible and a...

See similar textbooks

Similar questions

Incomc Taxes Then Company has been in operation for several years. It has both a deductible and a taxable temporary difference. At the beginning of 2019, its deferred tax asset was 690, and its deferred tax liability was 750. The company expects its lutine deductible amount to be deductible in 2020 and its Inline taxable amount to 1 taxable in 2021. In 2018, Congress enacted income tax rates for future years as follows: 2019, 30%; 2020, 34%; and 2021, 35%. At the end of 2019, Then reported income taxes payable of 25,800, an increase in its deferred tax liability of 300, and an ending balance in its deferred tax asset of 860. Thun has prepared the following schedule of items related to its income taxes for 2019. Required: Fill in the blanks in the preceding schedule. Show your calculations.
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.
Book Sherrod, Incorporated, reported pretax accounting income of $82 million for 2024. The following information relates to differences between pretax accounting income and taxable income: a. Income from installment sales of properties included in pretax accounting income in 2024 exceeded that reported for tax purposes by $7 million. The installment receivable account at year-end 2024 had a balance of $8 million (representing portions of 2023 and 2024 installment sales), expected to be collected equally in 2025 and 2026. b. Sherrod was assessed a penalty of $3 million by the Environmental Protection Agency for violation of a federal law in 2024. The fine is to be paid in equal amounts in 2024 and 2025. c. Sherrod rents its operating facilities but owns one asset acquired in 2023 at a cost of $84 million. Depreciation is reported by the straight-line method, assuming a four-year useful life. On the tax return, deductions for depreciation will be more than straight- line depreciation the…
Case Development began operations in December 2021. When property is sold on an installment basis, Case recognizes installment income for financial reporting purposes in the year of the sale. For tax purposes, installment income is reported by the installment method. 2021 installment income was $870,000 and will be collected over the next three years. Scheduled collections and enacted tax rates for 2022–2024 are as follows: 2022 $ 290,000 20 % 2023 320,000 25 2024 260,000 25 Case also had product warranty costs of $335,000 expensed for financial reporting purposes in 2021. For tax purposes, only the $80,000 of warranty costs actually paid in 2021 was deducted. The remaining $255,000 will be deducted for tax purposes when paid over the next three years as follows: 2022 $ 95,000 2023 84,000 2024 76,000 Pretax accounting income for 2021 was $1,005,000, which includes interest revenue of $25,000 from municipal bonds. The…
Case Development began operations in December 2016. When property is sold on an installment basis, Case recognizes installment income for financial reporting purposes in the year of the sale. For tax purposes, installment income is reported by the installment method. 2016 installment income was $600,000 and will be collected over the next three years. Scheduled collections and enacted tax rates for 2017–2019 are as follows: 2017 $150,000 30% 2018 $250,000 40% 2019 $200,000 40% Pretax accounting income for 2016 was $810,000, which includes interest revenue of $10,000 from municipal bonds. The enacted tax rate for 2016 is 30%. Required: 1. Assuming no differences between accounting income and taxable income other than those described above, prepare the appropriate journal entry to record Case’s 2016 income taxes. 2. What is Case’s 2016 net income? 3. How should the deferred tax amount be classified in a classified balance sheet?
Case Development began operations in December 2018. When property is sold on an installment basis, Case recognizes installment income for financial reporting purposes in the year of the sale. For tax purposes, installment income is reported by the installment method. 2018 installment income was $780,000 and will be collected over the next three years. Scheduled collections and enacted tax rates for 2019–2021 are as follows: 2019 $186,000 30% 2020 340,000 40 2021 254,000 40 Case also had product warranty costs of $98,000 expensed for financial reporting purposes in 2018. For tax purposes, only the $29,000 of warranty costs actually paid in 2018 was deducted. The remaining $69,000 will be deducted for tax purposes when paid over the next three years as follows: $23, 600 30% 28, 600 16,800 2019 2020 40 2021 40 Pretax accounting income for 2018 was $1,080,0o0, which includes interest revenue of $28,000 from municipal bonds. The enacted tax rate for 2018 is 30%.
Sherrod, Incorporated, reported pretax accounting income of $86 million for 2024. The following information relates to differences between pretax accounting income and taxable income: Income from installment sales of properties included in pretax accounting income in 2024 exceeded that reported for tax purposes by $5 million. The installment receivable account at year-end 2024 had a balance of $6 million (representing portions of 2023 and 2024 installment sales), expected to be collected equally in 2025 and 2026. Sherrod was assessed a penalty of $2 million by the Environmental Protection Agency for violation of a federal law in 2024. The fine is to be paid in equal amounts in 2024 and 2025. Sherrod rents its operating facilities but owns one asset acquired in 2023 at a cost of $92 million. Depreciation is reported by the straight-line method, assuming a four-year useful life. On the tax return, deductions for depreciation will be more than straight-line depreciation the first two…
Sherrod, Incorporated, reported pretax accounting income of $86 million for 2024. The following information relates to differences between pretax accounting income and taxable income: Income from installment sales of properties included in pretax accounting income in 2024 exceeded that reported for tax purposes by $5 million. The installment receivable account at year-end 2024 had a balance of $6 million (representing portions of 2023 and 2024 installment sales), expected to be collected equally in 2025 and 2026. Sherrod was assessed a penalty of $2 million by the Environmental Protection Agency for violation of a federal law in 2024. The fine is to be paid in equal amounts in 2024 and 2025. Sherrod rents its operating facilities but owns one asset acquired in 2023 at a cost of $92 million. Depreciation is reported by the straight-line method, assuming a four-year useful life. On the tax return, deductions for depreciation will be more than straight-line depreciation the first two…
In 2022, NB, Incorporated's federal taxable income was $242,000. Compute the required installment payments of 2023 tax in each of the following cases: Required: a. NB's 2023 taxable income is $593,000. b. NB's 2023 taxable income is $950,000. c. NB's 2023 taxable income is $1,400,000. a. Total installment payments b. Total installment payments c. Total installment payments Amount
Sherrod, Incorporated, reported pretax accounting income of $92 million for 2024. The following information relates to differences between pretax accounting income and taxable income: a. Income from installment sales of properties included in pretax accounting income in 2024 exceeded that reported for tax purposes by $6 million. The installment receivable account at year-end 2024 had a balance of $8 million (representing portions of 2023 and 2024 installment sales), expected to be collected equally in 2025 and 2026. b. Sherrod was assessed a penalty of $3 million by the Environmental Protection Agency for violation of a federal law in 2024. The fine is to be paid in equal amounts in 2024 and 2025. c. Sherrod rents its operating facilities but owns one asset acquired in 2023 at a cost of $104 million. Depreciation is reported by the straight-line method, assuming a four-year useful life. On the tax return, deductions for depreciation will be more than straight-line depreciation the…
Use this information for parts A and B. In 2026, Goodfellas Company reported pretax GAAP income of $400,000. During 2026, Goodfellas had the following differences between GAAP and tax: Recognized $100,000 installment sale revenue under GAAP in 2026. This revenue will be recognized for tax purposes in equal amounts over the next four years. Recognized $50,000 of depreciation in 2026 for tax. Starting in 2027, GAAP depreciation is $10,000 per year for the next five years. Received $100,000 in unearned rent revenue in 2026. Rent will be earned in equal amounts in 2027 and 2028. The tax rate for 2026 is 30 percent and 20 percent thereafter. A) What journal entry does Goodfellas record for taxes in 2026?
Dunn, Inc. uses the accrual method of accounting for financial reporting purposes and appropriately uses the installment method of accounting for income tax purposes. Installment income of $3,000,000 will be collected in the following years when the enacted tax rates are: Enacted Collection of Tax Rates Income 2024 $ 300,000 25% 2025 600,000 20% 2026 900,000 20% 2027 1,200,000 15% The installment income is Dunn's only temporary difference. What amount should be reported as a deferred income tax liability in Dunn's December 31, 2024 balance sheet? A) $480,000 B) $555,000 OC) $675,000 D) $750,000