9. Black Co., organized on January 2, 20x0, had pretax financial statement income c P500,000 and taxable income of P800,000 for the year ended December 31, 20×C The only temporary differences are accrued product warranty costs, which Blach expects to pay as follows: 20x1 P100,000 20x2 50,000 20x3 50,000 20x4 100,000 The enacted income tax rates are 25% for 20x0, 30% for 20x1 through 20x3, and 35% for 20x4. Black believes that future years' operations will produce profits. In its December 31, 20x0, balance sheet, what amount should Black report as deferred tax

9. Black Co., organized on January 2, 20x0, had pretax financial statement income c P500,000 and taxable income of P800,000 for the year ended December 31, 20×C The only temporary differences are accrued product warranty costs, which Blach expects to pay as follows: 20x1 P100,000 20x2 50,000 20x3 50,000 20x4 100,000 The enacted income tax rates are 25% for 20x0, 30% for 20x1 through 20x3, and 35% for 20x4. Black believes that future years' operations will produce profits. In its December 31, 20x0, balance sheet, what amount should Black report as deferred tax

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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11. Ace Company had a pretax accounting income of P5,000,000 for its first year of operations. The following differences are noted between accounting income and taxable income: 1) Nondeductible expenses - 200,000; 2) Nontaxable revenue - 500,000; 3) Gross income on installment sales reported in accounting income but not in taxable income - 1,000,000; 4) Provision for doubtful accounts - 100,000; and 5) Income tax rate - 30%. COMPUTE THE FOLLOWING: 1. Accounting income subject to tax; 2) Taxable income; 3) Total income tax expense; and 4) Current tax expense.
Q1. For Year 1, Pac Co. has a standard assurance-type warranty on its equipment. It estimated its 2-year equipment warranty costs based on $100 per unit sold in Year 1. Experience during Year 2 indicated that the estimate should have been based on $110 per unit. The effect of this $10 difference from the estimate is reported: In Year 2 income from continuing operations. As a cumulative amount, net of tax, below Year 2 income from continuing operations. As an accounting change retrospectively applied to Year 1 financial statements. As a correction of an error requiring Year 1 financial statements to be restated.
Black Company, organized on January 2, 20X1, had pre-tax accounting income of $500,000 and taxable income of $800,000 for the year ended December 31, 20X1. The only temporary difference is accrued product warranty costs, which are expected to be paid as follows: 20X2 20X3 20X4 20X5 $100,000 50,000 50,000 100,000 Circumstances indicate that it is highly likely that Black will have taxable income in the future. It had no temporary differences in prior years. The enacted income tax rate is 21%. Required: 1. In Black's December 31, 20X1, balance sheet, how much should the deferred tax asset be? 2. Suppose that as of December 31, 20X1, a newly enacted law called for the tax rate to change to 25%, effective January 1, 20X3. Then what would be the amount of the deferred tax asset at December 31, 20X1?
White Lemon Cameras has the following employees: Annual Taxable Wages $ 22,200 $ 34,800 $ 44,400 $ 37,000 $ 53,600 Employee Name M. Haskell V. Papadopoulos P. Anderson C. Billingmeier C. Johnson Required: White Lemon Cameras's SUTA tax rate is 5.4 percent and applies to the first $11,600 of employee wages. White Lemon Cameras's FUTA tax rate of 6% is subject to a 5.4% reduction and applies to the first $7,000 of employee wages. What is the annual amount of FUTA and SUTA taxes due for each employee? Note: Round your answers for "SUTA Due" to 2 decimal places. Employee M. Haskell V. Papadopoulos P. Anderson C. Billingmeier C. Johnson FUTA Due SUTA Due
the rate 0.6% was used for the net FUTAIn April of the current year, Steelman Press Company transferred Ken Sherm from its factory in Louisiana to its plant in Florida. The company's SUTA tax rates based on its experience ratings are 3.2% in Louisiana and 3.8% in Florida. The taxable wage limits are $7,700 in Louisiana and $7,000 in Florida. This year, Steelman Press Company paid Ken Sherm wages of $14,190; $4,950 were paid in Louisiana and the remainder in Florida. Compute the following; round your answers to the nearest cent. tax rate for employers. a)Amount of SUTA tax the company must pay to Florida on Sherm's wages? b) Amount of SUTA tax the company must pay to Louisiana on Sherm's wages? c). Amount of the net FUTA tax on Sherm's wages?
Kk131.
Note: For this textbook edition the rate 0.6% was used for the FUTA tax rate for employers. Example 5-8 The Iqbal Company of Georgia had a FUTA taxable payroll of $215,600 and a SUTA taxable payroll of $255,700 with a 5.6 percent SUTA tax rate. The company would pay unemployment taxes of: FUTA $215,600 × 0.006 = $1,293.60 SUTA $255,700 × 0.056 = 14,319.20 Total taxes $15,612.80 Kresloff Company has only two employees and is located in a state that has set an unemployment tax for the company of 4.8 percent on the first $12,000 of each employee’s earnings. Both employees are paid the same amount each week ($900) and have earned $11,500 up to this week’s pay. The unemployment taxes that the company must pay for this week’s pay would be $48.FUTA tax (both over $7,000) = $0.00SUTA tax ($1,000 × 0.048) = $48.00($500 of each employee’s pay is under the state taxable limit of $12,000) Peyton Company's payroll for the year is $730,110. Of this amount, $472,190 is for wages…
Tax Required information [The following information applies to the questions displayed below.] BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $118,500 paid to its employee, and FICA Medicare taxes are 1.45% of gross pay. For BMX, its FUTA taxes are 0.6% and SUTA taxes are 2.9% of the first $7,000 paid to its employee. FUTA SUTA b) Tax Compute BMX's amounts for each of these four taxes as applied to the employee's gross earnings for September under each of three separate situations (a), (b), and (c). (Round your answers to 2 decimal places.) b. FICA-Social Security FICA-Medicare FUTA SUTA c) Tax Gross Pay through August $ 6,700 18,500 112,500 FICA-Social Security FICA-Medicare FUTA SUTA FICA-Social Security FICA-Medicare Gross Pay for September $ 400 2,400 8,300 September Earnings Subject to Tax 400.00 400.00 S September Earnings Subject to Tax September Earnings Subject to Tax Tax Rate Tax Amount 6.20% $ 1.45% 0.60% 2.90% Tax Rate Tax Rate 24.80 5.80 Tax…
16. An employee receives a monthly salary of P20,0000. The following items are withheld from the monthly salary: Income tax, P2,000; SSS contribution, P800; Philhealth contribution, P300 and Pag-ibig contribution, P200. The net monthly amount received by the employee is P16,700. The monthly taxable income is: a. P16,700 b. P17,000 c. P18,700 d. P20.000
30. Banner Company had the following payroll data for the year: Gross eamings of employees Employee earnings not subject to Social Security tax Employee earnings not subject to FUTA or SUTA tax Assume the following: FICA tax rate on first $110,100 State Unemployment tax rate Federal Unemployment tax $900,000 100,000 610,000 7.65% (1.45% over $110,100) 5.4% (SUTA) (FUTA) .8% rate Instructions Compute Banner's payroll tax expense for the year. Make a summary journal entry to record the payroll tax expense.
J-Matt, Inc., had pretax accounting income of $331,000 and taxable income of $376,000 in 2021. The only difference between accounting and taxable income is estimated product warranty costs of $45,000 for sales in 2021. Warranty payments are expected to be in equal amounts over the next three years (2022–2024) and will be tax deductible at that time. Recent tax legislation will change the tax rate from the current 25% to 20% in 2023. Determine the amounts necessary to record J-Matt’s income taxes for 2021 and prepare the appropriate journal entry.
Entity A has an incentive compensation plan under which the sales manager receives a bonus equal to 10percent of the company's income after deductions for bonus and income taxes. Income before bonus and incometaxes is P500,000. The effective income tax rate is 30 percent. How much is the amount of bonus (rounded to the nearest peso)?a. 32,710 b. 60,748 c. 30,974 d. 37,210 How much is the amount of income tax?a. 131,776 b. 140,708 c. 138,837 d. 140,187