ch18 - class exercises and multiple choice

Mercury Limited reported earnings of $75,000 in 20X9. The company has $55,000 of depreciation expense this year, and claimed CCA of $90,000. The tax rate was 25%. At the end of 20X8, there was a $10,000 loss carryforward reported in a deferred tax asset account valued at $2,200, and a deferred tax liability of $35,200 caused by capital assets with a net book value of $500,000 and UCC of $340,000.  Required:What is the amount of income tax expense in 20X9? Record the entry income tax expense.   Record the entry loss carryforward.

Mercury Limited reported earnings of $75,000 in 20X9. The company has $55,000 of depreciation expense this year, and claimed CCA of $90,000. The tax rate was 25%. At the end of 20X8, there was a $10,000 loss carryforward reported in a deferred tax asset account valued at $2,200, and a deferred tax liability of $35,200 caused by capital assets with a net book value of $500,000 and UCC of $340,000.

Mercury Limited reported earnings of $75,000 in 20X9. The company has $55,000 of depreciation expense this year, and claimed CCA of $90,000. The tax rate was 25%. At the end of 20X8, there was a $10,000 loss carryforward reported in a deferred tax asset account valued at $2,200, and a deferred tax liability of $35,200 caused by capital assets with a net book value of $500,000 and UCC of $340,000.  Required:What is the amount of income tax expense in 20X9?   Prepare the income tax entry or entries.

Mercury Limited reported earnings of $75,000 in 20X9. The company has $55,000 of depreciation expense this year, and claimed. CCA of $90,000. The tax rate was 25%. At the end of 20X8, there was a $10,000 loss carryforward reported in a deferred tax asset. account valued at $2,200, and a deferred tax liability of $35,200 caused by capital assets with a net book value of $500,000 and UCC of $340,000. Required: What is the amount of income tax expense in 20X9? Tax expense $ Prepare the income tax entry or entries. View transaction list No 1 2 Date 20X9 23,250 20X9 View journal entry worksheet Income tax expense General Journal Deferred income tax asset Income tax payable Income tax payable Income tax expense Debit Credit

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Sol Limited. reported earnings of $510,000 in 20X8. The company has $91,000 of depreciation expense this year, and claimed CCA of $142,000. The tax rate was 25%. At the end of 20X7, there was a  $122,000 loss carryforward that was not recorded because use was considered less than probable. The company also reported a deferred tax liability of $71,000 caused by capital assets with a net book value of $1,310,000 and UCC of $1,010,000. The tax rate had been 20% in 20X7. The answer $84,250 and $114,750 is incorrect.  Required:What is the amount of income tax expense in 20X8?   Record the entry loss carryforward. Record the entry income tax expense.

Sol Limited. reported earnings of $510,000 in 20X8. The company has $91,000 of depreciation expense this year, and claimed CCA of $142,000. The tax rate was 25%. At the end of 20X7, there was a  $122,000 loss carryforward that was not recorded because use was considered less than probable. The company also reported a deferred tax liability of $71,000 caused by capital assets with a net book value of $1,310,000 and UCC of $1,010,000. The tax rate had been 20% in 20X7.  Required:What is the amount of income tax expense in 20X8?   Prepare the income tax entry or entries. - Record the entry income tax expense. - Record the entry loss carryforward.

Sol Limited. reported earnings of $410,000 in 20X8. The company has $81,000 of depreciation expense this year, and claimed CCA of $122,000. The tax rate was 30%. At the end of 20X7, there was a $102,000 loss carryforward that was not recorded because use was considered less than probable. The company also reported a deferred tax liability of $61,000 caused by capital assets with a net book value of $1,210,000 and UCC of $910,000. The tax rate had been 20% in 20X7. Required: What is the amount of income tax expense in 20X8? Prepare the income tax entry or entries. 1) Record the entry income tax expense 2) Record the entry loss carryforward.

A corporation sold a piece of equipment during the current tax year for $78,600. The accounting records show that its cost basis, B, is $190,000 and the accumulated depreciation is $139,200. Assume that the effective income tax rate as a decimal is 0.40 (40%). Based on this information, Solve, what is (a) the gain (loss) on disposal, (b) the tax liability (or credit) resulting from this sale, (c) the tax liability (or credit) if the accumulated depreciation was $92,400 instead of $139,200 ?

An entity reported the following information during the first year of operations: Pretax financial income                                                          9,000,000 Nontaxable interest received                                                 1,000,000 Long-term loss accrual in excess of deductible amount        1,500,000 Tax depreciation in excess of financial depreciation             2,000,000 Income tax rate                                                                       30% What is the deferred tax asset at year-end?

1. Pine Corporation’s books showed pretax income of P600,000 for the year ended December 31, 20x1. In the computation of federal income taxes, the following data were considered:  Gain on involuntary conversion (expropriation) P350,000 Depreciation deducted for tax purposes in excess of depreciation  deducted for book purposes 50,000 Estimated tax payments during 20x1 70,000 Income tax rate 30%  What amount should Pine report as its current income tax liability on its December 31, 20x1, balance sheet?

Stone Company reported pre-tax book income of $700,000 in 20X1, the first year of operation. The tax depreciation exceeded the book depreciation by $90,000. The tax rate for 20X1 and all future years was 21%.   What amount of deferred tax liability should Stone report in its December 31, 20X1, balance sheet? Select one: a. $6,300 b. $14,000 c. $18,900 d. $3,500

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Zeff Company prepared the following reconciliation for the · first year of operations: 1,600,000 Pretax financial income Nontaxable interest received Long-term loss accrual in excess of deductible amount Depreciation in excess of financial depreciation ( 50,000) 100,000 ( 250,000) 1,400,000 Taxable income (Tax rate is 30%) What amount should be reported as total income tax expense? a. 495,000 b. 480,000 c. 465,000 d. 420,000 What amount should be reported as deferred tax liability a. 90,000 b. 45,000 с. 75,000 d. 30,000 What amount should be reported as deferred tax asset? a. 30,000 b. 90,000 c. 45,000 d. 75,000

Blossom Corporation's partial income statement after its first year of operations is as follows: Income before income taxes     $3726000 Income tax expense       Current $1015000     Deferred        88200   1103200 Net income     $2622800 Blossom uses the straight-line method of depreciation for financial reporting purposes and accelerated depreciation for tax purposes. The amount charged to depreciation expense on its books this year was $2780000. No other differences existed between book income and taxable income except for the amount of depreciation. Assuming a 20% tax rate, what amount was deducted for depreciation on the corporation's tax return for the current year?

i need the answer quickly

B13.

Saginaw Incorporated completed its first year of operations with a pretax loss of $585,000. The tax return showed a net operating loss of $746,000, which the company will carry forward. The $161,000 book-tax difference results from excess tax depreciation over book depreciation. Management has determined that it should record a valuation allowance equal to the net deferred tax asset. Assume the current tax expense is zero. Note: If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Required: a. Prepare the journal entry to record the deferred tax consequences for recognition of the current year NOL before considering the valuation allowance. b. Prepare the journal entry to record the deferred tax consequences of the depreciation book-tax difference. c. Prepare the journal entry to record the deferred tax consequences of the valuation allowance. No 1 2 Transaction a b Deferred tax asset Deferred tax benefit Deferred tax expense X…

An entity reported the following information during the first year of operations: Pretax financial income                                                          9,000,000 Nontaxable interest received                                                 1,000,000 Long-term loss accrual in excess of deductible amount        1,500,000 Tax depreciation in excess of financial depreciation             2,000,000 Income tax rate                                                                       30% What is the total tax expense?

*see attached problem REQUIRED: What is the total income tax expense for the current year?

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Saginaw Incorporated completed its first year of operations with a pretax loss of $627,500. The tax return showed a net operating loss of $756,500, which the company will carry forward. The $129,000 book-tax difference results from excess tax depreciation over book depreciation. Management has determined that it should record a valuation allowance equal to the net deferred tax asset. Assuming the current tax expense is zero, prepare the journal entries to record the deferred tax provision and the valuation allowance. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) Required: a. Prepare the journal entry to record the deferred tax consequences for recognition of the current year NOL before considering the valuation allowance. b. Prepare the journal entry to record the deferred tax consequences of the depreciation book-tax difference. c. Prepare the journal entry to record the deferred tax consequences of the valuation…

Chandler Corporation reported pre-tax book income of $1,900,000. Tax depreciation exceeded book depreciation by $600,000. During the year the Company capitalized $250,000 into ending inventory under §263A. Capitalized inventory costs of $150,000 in beginning inventory were deducted as part of cost of goods sold on the tax return. Assuming a tax rate of 21%, compute the company’s taxes payable or refundable.

Saginaw Inc. completed its first year of operations with a pretax loss of $647,500. The tax return showed a net operating loss of $807,500, which the company will carry forward. The $160,000 book-tax difference results from excess tax depreciation over book depreciation. Management has determined that it should record a valuation allowance equal to the net deferred tax asset. Assuming the current tax expense is zero, prepare the journal entries to record the deferred tax provision and the valuation allowance. (If no entry is required for a transaction/event, select "No Journal Entry Required" In the first account field.) Required: a. Prepare the journal entry to record the deferred tax consequences for recognition of the current year NOL before considering the valuation allowance. b. Prepare the journal entry to record the deferred tax consequences of the depreciation book-tax difference. c. Prepare the journal entry to record the deferred tax consequences of the valuation allowance.…

17. In its first year of operations, Pioneer Natural reported pretax accounting income of $680 million for the current year. Depreciation reported in the tax return in excess of depreciation in the income statement was $600 million. The excess tax will reverse itself evenly over the next three years. The current year's tax rate of 25% will be reduced under the current law to 30% next year and 35% for all subsequent years. At the end of the current year, the deferred tax liability related to the excess depreciation will be: Multiple Choice   $200 million.   $180 million.   $240 million.   $210 million.

Lin Ltd. reported the following: Earnings (loss) Depreciation (assets have a cost of $360,000) CCA Non-deductible expenses Tax rate Taxable income Accounting earnings Permanent difference Accounting income subject to tax Temporary difference 1. What is the amount of the taxable income or loss in each year? (Negative amounts and deductible amounts should be indicated by a minus sign.) Taxable income 20X7 20x7 (first year of operations) $98,000 $45,000 $60,000 $18,000 20x8 30% 2008 $(166,000) $ 45,000 $ 70,000 $18,000 30%

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