Assume that Tyre Distributors Inc. prepared the following journal entry on December 31, 2021 relating to a 2021 timing (temporary) difference: DR Income tax expense- future $29,000 CR Future income tax liability $29,000 They provide you with the following additional information for 2021: - the tax rate was 25% in 2021 and prior years and the tax rate enacted in 2021 for 2022 and future years is 20%; - accounting income in 2021 was $700,000; - on December 31, 2020 the deferred tax liability was $100,000. The total tax expense (future plus current tax) for 2021 will be Select one: a. $169,000. b. $140,000. c. $135,000. d. $147,750. e. None of the above.
Assume that Tyre Distributors Inc. prepared the following journal entry on December 31, 2021 relating to a 2021 timing (temporary) difference: DR Income tax expense- future $29,000 CR Future income tax liability $29,000 They provide you with the following additional information for 2021: - the tax rate was 25% in 2021 and prior years and the tax rate enacted in 2021 for 2022 and future years is 20%; - accounting income in 2021 was $700,000; - on December 31, 2020 the deferred tax liability was $100,000. The total tax expense (future plus current tax) for 2021 will be Select one: a. $169,000. b. $140,000. c. $135,000. d. $147,750. e. None of the above.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Assume that Tyre Distributors Inc. prepared the following
DR Income tax expense- future $29,000
CR Future income tax liability $29,000
They provide you with the following additional information for 2021:
- the tax rate was 25% in 2021 and prior years and the tax rate enacted in 2021 for 2022 and future years is 20%;
- accounting income in 2021 was $700,000;
- on December 31, 2020 the
The total tax expense (future plus current tax) for 2021 will be
Select one:
a.
$169,000.
b.
$140,000.
c.
$135,000.
d.
$147,750.
e.
None of the above.
Assume for this question only that Tyre Distributors Inc. had current income tax payable in 2021 of $80,000 and there was also a permanent difference in computing taxable income for disallowed meals and entertainment expenses of $32,000. Other facts remain the same as Question 47.
How much was the accounting income or loss for 2021?
Select one:
a.
$433,000.
b.
$465,000.
c.
$288,000.
d.
$207,000.
e.
None of the above.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education