Tax rate % of current period income eligible for NOLS Year Income statement GAAP current period income / (loss) GAAP tax expense/ (benefit) (current period income x tax rate) Memo: Cash taxes due (taxable current period income x tax rate) Balance sheet Deferred tax assets-Beginning of period Plus: Change in deferred tax assets Equals: Deferred tax assets-End of period (NOLS remaining x tax rate) Memo: NOLS used up in period (80% x current period income) Memo: Taxable current period income (current period not offset by NOLs) Memo: NOLS remaining (Prior period NOLS less NOLS used in current period O $80 O $100 O $200 O $0 30% 80% 2019 (600) 300 0 2020 2021 00 200 2022 150

Tax rate % of current period income eligible for NOLS Year Income statement GAAP current period income / (loss) GAAP tax expense/ (benefit) (current period income x tax rate) Memo: Cash taxes due (taxable current period income x tax rate) Balance sheet Deferred tax assets-Beginning of period Plus: Change in deferred tax assets Equals: Deferred tax assets-End of period (NOLS remaining x tax rate) Memo: NOLS used up in period (80% x current period income) Memo: Taxable current period income (current period not offset by NOLs) Memo: NOLS remaining (Prior period NOLS less NOLS used in current period O $80 O $100 O $200 O $0 30% 80% 2019 (600) 300 0 2020 2021 00 200 2022 150

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 1P: Definitions The FASB has defined several terms in regard to accounting for income taxes. Below are...

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Definitions The FASB has defined several terms in regard to accounting for income taxes. Below are various code letters (for terms) followed by definitions. Code Letter Term Code Letter Term A. Future deductible amount H Deferred tax consequences B Income tax payable (or refund) I Future taxable amount Operating loss carryback Deferred tax liability D Valuation allowance K Temporary difference E Deferred tax asset Income tax expense (or benefit) F Operating loss carryforward M Deferred tax expense (or benefit) Taxable income Required: Indicate which term belongs with each definition by choosing the correct term. 1. The deferred tax consequences of future deductible amounts and operating loss carryforwards 2. A difference between the tax basis of an asset or liability and its reported amount in the financial statements that will result in taxable or deductible amounts in future years when the reported amount of the asset or liability is recovered or settled, respectively X 3. Temporary…
In computing the change in deferred tax accounts, which tax rates are used? A. Current tax rates B. Past years' tax rates O c. Enacted future tax rates O D. Estimated future tax rates
Marginal tax rates Using the tax rate schedule attached Perform the following: a. Find the marginal tax rate for the following levels of sole proprietorship earnings before taxes: $16,800; $59,500; $89,600; $151,000; $245,000; $451,200; $1,000,000 b. Plot the marginal tax rates (measured on the y-axis) against the pretax income levels (measured on the x-axis).
The amount of net deferred tax asset/(liability) on January 1, 20x8 is The amount of net deferred tax asset/(liability) on December 31, 20x8 is Income tax expense – current for 20x8 is
(1) Prepare the statement of income during Year 1. Pre-tax financial income Income tax expense-current Income tax expense-deferred Net income Effective tax rate (2) Prepare the tax accounts section of balance sheet as of December 31, Year 1. |Income tax payable Deferred tax assets Deferred tax liabilities
es Required: Determine the amount of average income tax liability per tax return, for each income range provided, using the information in the below table. Taxable Income and Total Tax Liability are in thousands. Note: Enter your answers in whole dollars and not in thousands. Round the final answers to the nearest dollar value. Item Number of returns Taxable income Total tax liability Average tax rate* Ranges of Adjusted Gross Income $15,000 to under $30,000 27,410,421 $ 189,345,926 $ 15,590,244 Under $15,000 30,714,603 $ 5,388,125 $ 532,117 9.88% *The average tax rate is total tax liability divided by taxable income. Under $15,000 $15,000 to under $30,000 $30,000 to under $50,000 $50,000 to under $100,000 $100,000 to under $200,000 $200,000 or more $30,000 to under $50,000 to under $50,000 $100,000 37,547,454 28,926,296 $ 1,912,925,663 $ 639,289,718 $215,589,667 $56,077,985 8.23% 8.77% 11.27% $100,000 to under $200,000 24,180,226 $ 2,687,818, 279 $385,658,662 14.35% $200,000 or more…
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*see attached problem REQUIRED: What amount should be reported as current portion of income tax expense in the income statement for the current year?
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