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1. Depreciation reported on the tax return exceeded depreciation reported on the income statement Difference Annual reversal in equal amounts over the years 2026 to 2029 2. Interest received on municipal bonds 3. 4. Rent collected in advance on January 1, 2025 for a 3-year period Portion of rent reported as unearned at December 31, 2025 for book purposes Income tax rate for 2025 Income tax rate for 2026 and subsequent years 5. Income taxes due per the tax return for 2025 6. No deferred taxes existed at the beginning of 2025. structions: (a) Compute taxable income for 2025. 780,000 $ $ 116,000 29,000 10,200 60,000 40,000 20% 17% 156,000 Use cell references to bring in numbers.

1. Depreciation reported on the tax return exceeded depreciation reported on the income statement Difference Annual reversal in equal amounts over the years 2026 to 2029 2. Interest received on municipal bonds 3. 4. Rent collected in advance on January 1, 2025 for a 3-year period Portion of rent reported as unearned at December 31, 2025 for book purposes Income tax rate for 2025 Income tax rate for 2026 and subsequent years 5. Income taxes due per the tax return for 2025 6. No deferred taxes existed at the beginning of 2025. structions: (a) Compute taxable income for 2025. 780,000 $ $ 116,000 29,000 10,200 60,000 40,000 20% 17% 156,000 Use cell references to bring in numbers.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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2026 Income Tax Expense Deferred Tax Liability Income Tax Payable Deferred Tax Asset (d) Prepare the income tax expense section of the income statement for 2025, beginning with "Income before income taxes." Income before income taxes Income Tax Expense Current Deferred Net Income Be sure to break income tax into current and deferred portions.
Transcribed Image Text:2026 Income Tax Expense Deferred Tax Liability Income Tax Payable Deferred Tax Asset (d) Prepare the income tax expense section of the income statement for 2025, beginning with "Income before income taxes." Income before income taxes Income Tax Expense Current Deferred Net Income Be sure to break income tax into current and deferred portions.
The following information is available for Remmers Corporation for 2025. 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement 2. 3. 4. 5. 6. Difference Annual reversal in equal amounts over the years 2026 to 2029 Interest received on municipal bonds Rent collected in advance on January 1, 2025 for a 3-year period Portion of rent reported as unearned at December 31, 2025 for book purposes Income tax rate for 2025 Income tax rate for 2026 and subsequent years Income taxes due per the tax return for 2025 No deferred taxes existed at the beginning of 2025. Instructions: (a) Compute taxable income for 2025. (c) (b) Compute pretax financial income for 2025. Taxable Income Differences Add: Excess Depreciation Municipal Interest Less: Unearned Rent Pre-Tax Financial Income 2025 Income Tax Expense Deferred Tax Asset 780,000 Income Tax Payable Deferred Tax Liability 116,000 10,200 (40,000) $ 780,000 $ 866,200 $ $ Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2025 and 2026. Taxable income for 2026 421,000 Debit 71,570 $ 116,000 29,000 10,200 60,000 40,000 20% 17% 156,000 Credit 19,720 Use cell references to bring in numbers. Use cell references to bring in numbers.
Transcribed Image Text:The following information is available for Remmers Corporation for 2025. 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement 2. 3. 4. 5. 6. Difference Annual reversal in equal amounts over the years 2026 to 2029 Interest received on municipal bonds Rent collected in advance on January 1, 2025 for a 3-year period Portion of rent reported as unearned at December 31, 2025 for book purposes Income tax rate for 2025 Income tax rate for 2026 and subsequent years Income taxes due per the tax return for 2025 No deferred taxes existed at the beginning of 2025. Instructions: (a) Compute taxable income for 2025. (c) (b) Compute pretax financial income for 2025. Taxable Income Differences Add: Excess Depreciation Municipal Interest Less: Unearned Rent Pre-Tax Financial Income 2025 Income Tax Expense Deferred Tax Asset 780,000 Income Tax Payable Deferred Tax Liability 116,000 10,200 (40,000) $ 780,000 $ 866,200 $ $ Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2025 and 2026. Taxable income for 2026 421,000 Debit 71,570 $ 116,000 29,000 10,200 60,000 40,000 20% 17% 156,000 Credit 19,720 Use cell references to bring in numbers. Use cell references to bring in numbers.
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