I am working on a homework assignment and a question states that a $1500 expense was not previously considered when calculating the businesse's income tax expense. I am supposed to make an adjusting entry for this situation. I am uncertain as to whether or not I increase income tax expense and income tax payable or decrease income tax expense and income tax payable. I am leaning more towards it would increase their taxable income, therefore increasing income tax expense and income tax payable. If this is the case, could you explain in more detail why this is the case?

I am working on a homework assignment and a question states that a $1500 expense was not previously considered when calculating the businesse's income tax expense. I am supposed to make an adjusting entry for this situation. I am uncertain as to whether or not I increase income tax expense and income tax payable or decrease income tax expense and income tax payable. I am leaning more towards it would increase their taxable income, therefore increasing income tax expense and income tax payable. If this is the case, could you explain in more detail why this is the case?

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter12: Tax Credits And Payments

Section: Chapter Questions

Problem 1DQ

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Similar questions

A purpose of an adjustment to income is to (option: a.reduce gross income? b. help determine gross income? c. reduce tax owed after tax has been determined?). Another purpose of an adjustment to income is to (option: a. help determine adjusted gross income? b. calculate taxable income after agi has been determined? c. be subtracted after agi to help determine taxable income?)
I understand the calculations portion of it but im confused with the final income tax refund amount. Its -$5,211 that would mena they would owe instead of getting a refund or am i looking at it wrong?
‘Income tax shall be paid on taxable income times tax rate. It makes sense to pay income tax for current year, but we should not be asked to account for deferred tax assets and liabilities’. Do you agree with this statement? Discuss your arguments.
(Explain Future Taxable and Deductible Amounts, How Carryback and Carryforward Affects Deferred Taxes) Maria Rodriquez and Lynette Kingston are discussing accounting for income taxes. They are currently studying a schedule of taxable and deductible amounts that will arise in the future as a result of existing temporary differences. The schedule is as follows. Check the following image for schedule. Instructions(a) Explain the concept of future taxable amounts and future deductible amounts as illustrated in the schedule.(b) How do the carryback and carryforward provisions affect the reporting of deferred tax assets and deferred tax liabilities?
(G.) An increase in the Deferred Tax Liability account on the balance sheet is recorded by a ____________ to the Income Tax Expense account. (debit / credit) (H.) An income statement that reports current tax expense of $85,200 and deferred tax benefit of $23,400 will report total income tax expense of $___________. (I.) A valuation account is needed whenever it is judged to be ____________ that a portion of a deferred tax asset ______________ realized. (more likely than not / equally likely ; will be / will not be) (J.) If the tax return shows total taxes due for the period of $75,800 but the income statement shows total income tax expense of $54,900, the difference of $20,900 is referred to as deferred tax _____________. (expense / benefit)
Is this statement correct based on the form 1040 above? a. The calculation for the balance due can be found on a 1040 worksheet and not on the form 1040 itself. b. The child tax credit increases the taxpayer's refund by $500 Edit - this is the only imformation the test provides for this qiestion
One of the following statements is correct. A choice of by an individual of the Optional Standard Deduction means that: His/Her income tax return need not be accompanied by financial statements. S/he need not need keep books of accounts S/he need not have records of gross income His/Her choice can still be changed by filing an amended return.
A friend says to you, “I don’t understand how taxable temporary differences can be ‘liabilities’ and how deductible temporary differences can be ‘assets.’ It seems to me that these temporary differences relate only to the future and that accounting is based on ‘historical cost.’ In addition, the government frequently changes the tax laws, so no one knows what the future tax laws will be.” Required: Prepare a written response for your friend that explains why deferred tax assets and deferred tax liabilities are recognized and reported on a corporation’s balance sheet. Include a discussion of a valuation allowance.
Under a self-assessment system, taxpayers are required to: i. file estimated income tax returns. ii. make quarterly estimated payments. iii. file final annual income tax return; and pay the difference between the estimated income tax return and the final tax return, if any. iv. Wait until the Commissioner sends an assessment to pay their taxes.
PLEASE ANSWER ALL QUESTIONS IN BOTH 1 AND 2 PLEASE. 1. Some accountants believe that deferred taxes should not be recognized for certain temporary differences. What is the conceptual basis for this argument? 2.What events create permanent differences between accounting income and taxable income? What effect do these events have on the determination of income taxes payable and deferred income taxes? Identify three examples of permanent differences between accounting income and taxable income.
I got the income tax expense wrong. How can I calculate this ? I want to learn the correct way please.
I have two similar Becker review questions that are part of my homework. I can't find any solutions that match my options to check my work. The two checks are Two independent situations are described below. Each situation has future deductibel and/or future taxable amounts producted by temporary differences. Situation 1 2 Taxable Income 40,000 80,000 Amounts at year-end Future Deductible amt 5,000 10,000 Future at Beg of year 0.0 5,000 Bal at Beg of year Deferred tax asset 1,000 4,000 Deferred tax liab 0.0 1,000 Enacted state and Federal tax rate is 25%. Determine the change in the deferred tax asset balance for the year. options are a 5,000 and 10,000 b 250 and 1,500 c 1,250 and 2,500 d 0 and 0 I chose answer b Are you able to confirm if I am correct or if I…