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- Question 1. Ltd purchased a machine on 1 July 2014 for $320,000. The machine is expected to have a useful life of 4 years (straight-line basis) and no residual value. The ATO allows the company to depreciate the asset over 5 years for taxation purposes. The profit before tax for the company for the year ending 30 June 2015 is $500,000. The tax rate is 30%. Required: A).Calculate the company's taxable profit and hence its tax payable for 2015. B).Determine the deferred tax liability or deferred tax asset that will result. C). Prepare the necessary journal entries on 30 June 2015.(Two Differences, One Rate, Beginning Deferred Balance, Compute Pretax Financial Income) Andy McDowell Co. establishes a $100 million liability at the end of 2017 for the estimated site-cleanup costs at two of its manufacturing facilities. All related closing costs will be paid and deducted on the tax return in 2018. Also, at the end of 2017, the company has $50 million of temporary differences due to excess depreciation for tax purposes, $7 million of which will reverse in 2018. The enacted tax rate for all years is 40%, and the company pays taxes of $64 million on $160 million of taxable income in 2017. McDowell expects to have taxable income in 2018.Instructions(a) Determine the deferred taxes to be reported at the end of 2017.(b) Indicate how the deferred taxes computed in (a) are to be reported on the balance sheet.(c) Assuming that the only deferred tax account at the beginning of 2017 was a deferred tax liability of $10,000,000, draft the income tax expense portion of the income…During 2017, Liselotte Company reported income of$1,500,000 before income taxes and realized a gain of$450,000 on the disposal of assets related to a discontinuedoperation. The criteria for classification as a discontinued operation is appropriate for this sale. The income issubject to income taxation at the rate of 34%. The gainon the sale of the plant is taxed at 30%. Indicate anappropriate presentation of these items in the incomestatement.
- Esquire Comic Book Company had income before tax of $1,250,000 in 2024 before considering the following material items: 1. Esquire sold one of its operating divisions, which qualified as a separate component according to generally accepted accountin principles. The before-tax loss on disposal was $365,000. The division generated before-tax income from operations from the beginning of the year through disposal of $550,000. 2. The company incurred restructuring costs of $80,000 during the year. Required: Prepare the income statement for Esquire beginning with income from continuing operations. Assume an income tax rate of 25% Ignore EPS disclosures. Note: Amounts to be deducted should be indicated with a minus sign. ESQUIRE COMIC BOOK COMPANY Partial Income Statement For the Year Ended December 31, 2024 Income from continuing operations Discontinued operations. Gain on sale of assets Income from operations of discontinued component Income tax benefit. Income tax expense16. Jamela Company used the composite method of depreciation based on a 25% composite rate. On January 1, 2022, the total cost of equipment was P5,000,000 with total residual value of P600,000 and accumulated depreciation of P3,000,000. In January 2022, the entity purchased an equipment for P2,500,000 with no residual value. On December 31, 2022, the entity sold an equipment costing P1,000,000 for P350,000. The said equipment was acquired on January 1, 2020 with residual value of P200,000. What amount of depreciation should be recognized in 2022? A. 1,625,000 B. 1,875,000 C. 1,525,000 D. 1,000,00015. The Lucio Corporation presented the following balances from the historical peso income statement for the year ended December 31, 2018: Sales P350,000 Cost of goods sold Depreciation - building Depreciation - equipment All other expenses Other information include: 218,000 34,000 23,000 48,000 • Merchandise available for sale came from 2017 inventory of P28,750 and 2018 purchases of P220,000. Building costing P850,000 was acquired at the end of 2015. Equipment totalled P115,000, of which P85,000 was bought at the end of 2015 and P30,000 was bought at the end of 2017. • The company uses the FIFO method of inventory valuation; average indexes for the year are used in restating inventories. General price indexes at year end are as follows: 2015 - 100 2017 - 106 2016 - 102 2018 - 112 (assume that all changes in the general price level index tool place more or less evenly during the year.) What should Lucio Corporation report as net income for the year ended December 31, 2018 restated for…
- Lend Co. acquired inventories on May 1, 2021 from its 70% ownedsubsidiary, Martin Company. The inventories were sold for P188,000,including the 25% mark up on cost. Out of these inventories, 65% weresold to outsiders. During 2022, Lend Co. reported net income ofP430,000 and Martin Co. reported net income of P280,000.How much is the realized profit to be allocated to non-controlling interestin 2022?DEF Company sells plant assets that originally cost $150,000 for $52,000 on December 31, 2011. The accumulated depreciation account had a balance for $60,000 after the current year’s depreciation of $15,000 had been recorded. The company should recognize a:A) $100,000 loss on disposalB) $40,000 gain on disposalC) $40,000 loss on disposalD) $25,000 loss on disposal17.On December 31, 20x1, the building of Borong Co. with a historical cost of #320,000,000, accumulated depreciation of #160,000,000, and an estimated useful life of 20 years was determined to have a fair value of $200,000,000. Borong Co. is subject to an income tax rate of 30%. Under the elimination method, the entry to record the revaluation includes a. a debit to accumulated depreciation for $160,000,000. b. a debit to accumulated depreciation for $40,000,000. c. a debit to building for $120,000,000. d. a credit to building for $160,000,000.
- 2) Troy Ltd purchased a new machine on 1 October 2016 at a cost of $114,000. The entity estimated that the machine has a residual value of $18,000. The machine is expected to be used for 20,000 working hours during its 5-year life. Calculate the depreciation expense under the straight-line method for 2016 and 2017, assuming a 31 December year-end. 田 2016 2017 %24 %24Subject: Corporate Accounting Q) Jaguar Ltd purchased a machine on 1 July 2016 at the cost of $640,000. The machine is expected to have a useful life of 5 years (straight-line basis) and no residual value. For taxation purposes, the ATO allows the company to depreciate the asset over 4 years.The profit before tax for the company for the year ending 30 June 2017 is $600,000. To calculate this profit the company has deducted $60,000 entertainment expense, and $80,000 salary expense that has not yet been paid. Also the company has included $70,000 interest as income that the company has not yet received. The tax rate is 30%.Required: (a) Calculate the company’s taxable profit and hence its tax payable for 2017. (b) Determine the deferred tax liability and/or deferred tax asset that will result. (c) Prepare the necessary journal entries on 30 June 2017.The following information is available for Northwest Enterprises Ltd., for the year ended December 31, 2017. All amounts noted below are before income tax • Operating income from discontinued operations: • Net sales revenue from continuing operations: • Gain on sale of land used in continuing operations: • Loss on disposal of discontinued operations: • Cost of goods sold for continuing operations: • Operating expenses for continuing operations: Loss due to warehouse fire (continuing operations): $80,000 $75,000 $1,400,000 $32,000 $120,000 $850,000 $325,000 On January 1, 2017, Northwest had 100,000 common shares outstanding. Northwest issued 20,000 common shares on April 1, 2017. On September 1, Northwest declared a 3 for 2 stock split. The company has an income tax rate of 20%. Required: Prepare an income statement in good form for Northwest. Include the required earnings per share disclosure.