Nalad Corp. provided the following data related to accounting and taxable income:20X820X9Pre-tax accounting income (financial statements)Taxable income (tax return)$510,000295,00040%$495,000710,00040%Income tax rateThere are no existing temporary differences other than those reflected in these data. There are no permanent differences.Required:1-a. How much tax expense would be reported in each year if the taxes payable method was used?Tax Expense20X820X91-b. What is the implied tax rate? (Round your answers to 1 decimal place.)20X820X9Implied tax rate 2-a. How much tax expense would be reported using comprehensive tax allocation (liability method).Tax Expense20X820X92-b. How much deferred income tax would be reported using comprehensive tax allocation (liability method).DeferredIncome Tax20X820X92-c. Why is the two year total tax expense is the same under both tax payable method and liability method? (Select all that apply.)O Temporary difference between accounting and taxable income has reversed over two-year time frame.Temporary difference between accounting and taxable income has not reversed over two-year time frame.Permanant difference between accounting and taxable income has reversed over two-year time frame.Permanant difference between accounting and taxable income has not reversed over two-year time frame.OO00

20X8 20X9 tax accounting income (financial statements) ple income (tax return) ne tax rate $510,000 295,000 $495,000 710,000 40% 40% are no existing temporary differences other than those reflected in these data. There are no ed:

20X8 20X9 tax accounting income (financial statements) ple income (tax return) ne tax rate $510,000 295,000 $495,000 710,000 40% 40% are no existing temporary differences other than those reflected in these data. There are no ed:

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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Subject: accounting
P18-2 Temporary and Permanent Differences In the current year, you are calculating a diversified company’s deferred taxes. Based on an analysis of the company’s current taxable income and pretax financial income, you have iden-tified the following items that create differences between the two amounts and that may result in differences between the company’s future taxable income and its future pretax financial income: ________ 1. Percentage depletion deducted for taxes in excess of cost depletion for financial reporting _________2. Warranty costs to be deducted for taxes that were deducted as warranty expense for financial reporting _________3. Gross profit to be recognized for taxes under the completed-contract method that was recognized for financial reporting under the percentage-of-completion method _________4. Officers’ life insurance premium expense deducted for financial reporting _________5. Rent revenue to be recognized for financial reporting that was reported for taxes when…
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Status Single DATA TABLE Total Tax Payments $ 8,342 Taxable Income $ 55,060.00 20,000 30,000 Total Tax $ 7,972 40,000 Refund Amount Amount Owed Use Goal Seek to find the Taxable Income (C5) that results in the Total Tax (C7) shown. Answer to the nearest 0.01. Do not include any punctuation ($ or ,) in your answer! Example of accepted answer: 12345.67Examples of incorrect answers: $12,345.67, 12,345.67, $12345.67 Taxable Income Total Tax Answer $2,600 Answer $4,200 Answer $8,500 Answer $10,500 Answer $22,000 Be sure to answer to the neared 0.01.
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Required information Problem 16-8 Multiple differences; taxable income given; two years; balance sheet classification; change in tax rate [LO16-4, 16-6, 16-8] [The following information applies to the questions displayed below.] Arndt, Inc., reported the following for 2018 and 2019 ($ in millions): 2018 2019 Revenues $ 995 $1,073 Expenses Pretax accounting income (income statement) Taxable income (tax return) 800 840 $ 195 $ 195 233 $ 245 Tax rate: 40% a. Expenses each year include $30 million from a two-year casualty insurance policy purchased in 2018 for $60 million. The cost is tax deductible in 2018. b. Expenses include $2 million insurance premiums each year for life insurance on key executives. c. Arndt sells one-year subscriptions to a weekly journal. Subscription sales collected and taxable in 2018 and 2019 were $39 million and $57 million, respectively. Subscriptions included in 2018 and 2019 financial reporting revenues were $36 million ($14 million collected in 2017 but not…
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Problem 16-145 Four independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences reported first on: Income Statement Tax Return Revenue Expense Revenue Expense $21,000 (1.) (2.) (3.) (4.) $21,000 $15, 200 $21,000 $15, 200 $21, 000 $10, 200 Required: For each situation, determine the taxable income assuming pretax accounting income is $100,000. (Amounts to be deducted should be indicated by a minus sign.) 1 2 3 4 Accounting income Temporary differences: Income statement first: Revenue Expense Tax return first: Revenue Expense Taxable income
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