10. On January 1, 20x1, Sunrise Co. has a deferred tax asset of P120,000 arising solely from an operating loss carryforward. Sunrise Co. is subject to an income tax rate of 30%. For the year 20x1, Sunrise expects to earn profit of P1,200,000 before tax and before the loss carryforward. Sunrise Co. earns profits before tax of P350,000, P200,000 and P400,000, in the first, second and third quarters of 20x1. How much are the income tax expenses recognized in the interim periods? 1st quarter a. 60,000 b. 70,000 3rd quarter 90,000 80,000 80,000 90,000 2nd quarter 40,000 40,000 C. 80,000 d. 80,000 50,000 50,000

10. On January 1, 20x1, Sunrise Co. has a deferred tax asset of P120,000 arising solely from an operating loss carryforward. Sunrise Co. is subject to an income tax rate of 30%. For the year 20x1, Sunrise expects to earn profit of P1,200,000 before tax and before the loss carryforward. Sunrise Co. earns profits before tax of P350,000, P200,000 and P400,000, in the first, second and third quarters of 20x1. How much are the income tax expenses recognized in the interim periods? 1st quarter a. 60,000 b. 70,000 3rd quarter 90,000 80,000 80,000 90,000 2nd quarter 40,000 40,000 C. 80,000 d. 80,000 50,000 50,000

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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Kucing Garong Construction Company decided at the beginning of 2020 to change from the cost recovery method to the percentage-of-completion method for financial reporting purposes. The company will continue to use the cost-recovery method for tax purposes. For years prior to 2020, pretax income under the two methods was as follows: percentage-of-completion £144,000, and cost-recovery £114,000. The tax rate is 35%. Kucing Garong has a profit-sharing plan, which pays all employees a bonus at year-end based on 1.5% of pretax income. What is the amount of the indirect effect of Kucing Garong’s change in accounting policy that will be reported in the 2020 income statement, assuming that the profit-sharing contract explicitly requires adjustment for changes in income numbers?
Z Ltd.has provided depreciation as per accounting records 40 lakhs but as per tax records t60 lakhs. Unamortized preliminary expenses, as per tax records is 20,000. there is adequate evidence of future profit sufficiency. How much deferred tax asset/liability should be recognized as transition adjustment? Tax rate 30%.
During its first three years of operations a company reported pre-tax book income of $1,000,000 in year 1, ($1,800,000) in year 2, and $3,000,000 in year 3. The income tax rate applicable to each of the years was 40%. Assume that there weren’t any temporary differences and a valuation allowance was not necessary. What is the amount of the deferred tax asset reported in the year 2 year-end balance sheet if the company elected a loss carryback?
Before considering a net operating loss carryforward of $75 million, Fama Corporation reported $110 million of pretax accounting and taxable income in the current year. The income tax rate for all previous years was 35%. On January 1 of the current year, a new tax law was enacted, reducing the rate to 25% effective immediately. Fama's income tax payable for the current year would be: Note: Round your answer to the nearest whole million. $65 million. $19 million. $12 million. $9 million.
Lillian Farms reported a net operating loss of $240,000 for financial reporting and tax purposes in 2019. The enacted tax rate is 25 %. Taxable income, tax rates, and income taxes paid in Lillian's first two years of operation were as follows: 2017...$100,000...40% 2018...$60,000...25% Assume NOL is allowed to carryback for two years, the amount of net loss reported on the income statement for the year ended December 31, 2019 would be: a) $ (180,000). b) $(175,000). c) 9(165,000). d) $(155,000).
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Drew Company has a deferred tax asset of $54,000 before recording an allowance of $7000 for estimating it is more likely than not that this amount will not be realized in the future. The result of recording this allowance is The deferred tax asset will now be a net amount of $47,000 Income tax expense will be reduced by $7000 x the tax rate. Income tax expense will be increased by $7000 x the tax rate. Net income will be increased by $7000.
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Before considering a tax loss carryforward of $80 million, Aero Corporation reported $200 million of pretax accounting and taxable income in the current year. The income tax rate for all previous years was 40%. On January 1 of the current year a new tax law was enacted, reducing the rate to 35% effective immediately. Aero's income tax payable for the current year would be: Select one: a. $48 million. b. $28 million. c. $36 million. d. $42 million. e. $80 million.
Eurgher Ltd. had a taxable loss of $354,000 in 20X7. The tax rate in 20X7 is 32%. In the past three years, the company had the following taxable income and tax rates: Taxable income Tax rate 20X5 20X4 $236,000 $141,600 Refund amount 36% 38% 20X6 $94,400 40% There are no temporary differences other than those created by income tax losses. Required: 1. What is the amount of refund that will be claimed in 20X7, taking the loss back to the oldest possible year, first? Provide the journal entry for income tax receivable in 20X7. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) =