Homework Help is Here – Start Your Trial Now!
Business
Accounting
Angel Corporation reported pretax book income of $1,002,000. During the current year, the net reserve for warranties increased by $25,300. In addition, tax depreciation exceeded book depreciation by $100,500. Finally, Angel subtracted a dividends received deduction of $25,400 in computing its current-year taxable income. Angel's hypothetical tax expense in its reconciliation of its income tax expense is:

Angel Corporation reported pretax book income of $1,002,000. During the current year, the net reserve for warranties increased by $25,300. In addition, tax depreciation exceeded book depreciation by $100,500. Finally, Angel subtracted a dividends received deduction of $25,400 in computing its current-year taxable income. Angel's hypothetical tax expense in its reconciliation of its income tax expense is:

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Hh1.

 

55 Angel Corporation reported pretax book income of $1,002,000. During the current year, the net reserve for warranties increased by $25,300. In addition, tax depreciation exceeded book depreciation by $100,500. Finally, Angel subtracted a dividends received deduction of $25,400 in computing its current-year taxable income. Angel's hypothetical tax expense in its reconciliation of its income tax expense is: Multiple Choice O $205,107 O $194,628 $210,420. $189,315.
Transcribed Image Text:55 Angel Corporation reported pretax book income of $1,002,000. During the current year, the net reserve for warranties increased by $25,300. In addition, tax depreciation exceeded book depreciation by $100,500. Finally, Angel subtracted a dividends received deduction of $25,400 in computing its current-year taxable income. Angel's hypothetical tax expense in its reconciliation of its income tax expense is: Multiple Choice O $205,107 O $194,628 $210,420. $189,315.
Lynch Company had a net deferred tax asset of $68,136 at the beginning of the year, representing a net taxable deductible difference of $200,400 (taxed at 34 percent). During the year, Lynch reported pretax book income of $801,600. Included in the computation were favorable temporary differences of $20,400 and unfavorable temporary differences of $50,200. At the beginning of the year, Congress reduced the corporate tax rate to 21 percent. Lynch's deferred income tax expense or benefit for the current year would be: Multiple Choice net deferred tax expense of $19,794. net deferred tax benefit of $32,310. net deferred tax expense of $6,258. net deferred tax benefit of $6,258.
Transcribed Image Text:Lynch Company had a net deferred tax asset of $68,136 at the beginning of the year, representing a net taxable deductible difference of $200,400 (taxed at 34 percent). During the year, Lynch reported pretax book income of $801,600. Included in the computation were favorable temporary differences of $20,400 and unfavorable temporary differences of $50,200. At the beginning of the year, Congress reduced the corporate tax rate to 21 percent. Lynch's deferred income tax expense or benefit for the current year would be: Multiple Choice net deferred tax expense of $19,794. net deferred tax benefit of $32,310. net deferred tax expense of $6,258. net deferred tax benefit of $6,258.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS