25.Company appropriatelyaccrual method for revenue recognition for accounting purposes. Pertinent data at December31, 2016, the close of the first year of operations, are as follows:Revenue RecognizedRevenue RecognizedCustomerfor Accounting Purposesfor Tax PurposesLowe's Builders$200,000$100,000Top Down Plumbing500,000350,000Glass Plus Windows600,000350,000Lewes's tax rate is 30%. What amount should be included in the deferred tax account atDecember 31, 2016 for these installment sales? asseta. $150,000 deferred tax assetb. $150,000 deferred tax liabilityc. $500,000 deferred tax assetd. $500,000 deferred tax liability

The objective of the question is to calculate the amount that should be included in the deferred tax…

Answered: 25. Company appropriately accrual…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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The accounting income (loss) figures for Pronghorn Corporation are as follows: 2015 2016 2017 2018 2019 2020 2021 $162,000 242,000 82,000 (162,000) (382,000) 140,000 154,000 Accounting income (loss) and taxable income (loss) were the same for all years involved. Assume a 30% tax rate for 2015 and 2016, and a 25% tax rate for the remaining years. Prepare the journal entries for each of the years 2017 to 2021 to record income tax expense and the effects of the tax loss carrybacks and carryforwards, assuming Pronghorn Corporation uses the carryback provision first. All income and losses relate to normal operations and it is more likely than not that the company will generate substantial taxable income in the future.
Information relating to Waukegan Company for the current year is as follows: Income from continuing operations before tax $ 140,000 Income from discontinued operations (pretax) 40,000 What is the amount of the income tax expense that should be allocated to the income from discontinued operations? (Assume the effective tax rate is 25%) income tax expense
Dry Valley Corporation reported the following items in its adjusted trial balance for the year ended December 31, 2026: Income from continuing operations before income taxes Gain on disposal of discontinued component Loss from operations of discontinued component Dry Valley is subject to a 20% tax rate. Instructions $120,000 28,000 (60,000) Prepare the December 31, 2026, income statement for Dry Valley Corporation, starting with income from continuing operations before income taxes.
am.104.
Oak Corporation has the following general business credit carryovers: 2016 $7,250 2017 21,750 2018 8,250 2019 25,750 Total carryovers $63,000 The general business credit generated by activities during 2020 equals $50,400 and the total credit allowed during the current year is $87,000 (based on tax liability). a. Enter the amount (if any) of each year's carryover utilized in 2020. Year Amount ofCarryoverUtilized 2016 $ 2017 $ 2018 $ 2019 $ 2020 $ b. What is the amount of any unused credits carried forward to 2021?
Times-Roman Publishing Company reports the following amounts in its first three years of operation: ($ in 000s) 2016 2017 2018 $250 290 $240 $230 Pretax accounting income Taxable income 220 260 The difference between pretax accounting income and taxable income is due to subscription revenue for one-year magazine subscriptions being reported for tax purposes in the year received, but reported in the income statement in later years when earned. The income tax rate is 40% each year. Times-Roman anticipates profitable operations in the future. Required: 1. What is the balance sheet account for which a temporary difference is created by this situation? 2. For each year, indicate the cumulative amount of the temporary difference at year-end. 3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax asset or a deferred tax liability? 4. How should the deferred tax amount be classified and reported in the balance sheet?
Candyland Property and Casualty Insurance Corporation reported a net operating loss of $220,000 for financial reporting and tax purposes in 2019. The enacted tax rate is 25%. Taxable income and tax rates in Candyland's first two years of operation were as follows: 2017 $40,000 30% 2018 $100,000 25% Assuming NOL carryback is allowed for companies up to 2 years, the amount of net loss reported on the income statement for the year ended December 31, 2019 would be: O $154,000 O $158,000 O $163,000 O $165,000
The following balances were taken from the books of Skysong Corp. on December 31, 2025. Interest revenue Cash Sales revenue Accounts receivable Prepaid insurance Sales returns and allowances Allowance for doubtful accounts Sales discounts Land Equipment Buildings Cost of goods sold $87,250 52,250 1,381,250 151,250 21,250 151,250 8,250 46,250 101,250 201,250 141,250 622,250 Assume the total effective tax rate on all items is 20%. Accumulated depreciation-equipment Accumulated depreciation-buildings Notes receivable Selling expenses Accounts payable Bonds payable Administrative and general expenses Accrued liabilities Interest expense Notes payable Loss from earthquake damage Common stock Retained earnings $41,250 29,250 156,250 195,250 171,250 101,250 98,250 33,250 61,250 101,250 151,250 501,250 22,250 Prepare a multiple-step income statement; 100,000 shares of common stock were outstanding during the year. (Round earnings per
At the beginning of 2021, Pitman Co. had pretax financial income of $1,200,000. Additionally, there was a timing difference of $300,000 due to an accounts receivable that will not be collected until the following year. The tax rate us 30%. A. Calculate the total taxable income for 2021. B. Calculate Income tax expense, income tax payable, and the deferred amount for 2021, and create the journal entry.
Se.125.
Lewes Company appropriately uses the installment sales method for tax purposes and the accrual method for revenue recognition for accounting purposes. Pertinent data at December 31, 2016, the close of the first year of operations, are as follows: Revenue Recognized Revenue Recognized Customer for Accounting Purposes for Tax Purposes Lowe's Builders $200,000 $100,000 Top Down Plumbing 500,000 350,000 Glass Plus Windows 600,000 350,000 Lewes's tax rate is 30%. What amount should be included in the deferred tax account at December 31, 2016 for these installment sales?

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