At the beginning of 2024, a construction company that began operations in 2022 changed from the completed-contract method to thepercentage-of-completion method for accounting purposes but not for tax purposes. Gross profit figures under both methods for thepast three years appear below:202220232024Completed-Contract$565000725000800000$2090000Percentage-of-Completion$101000010500001150000$3210000The company reports two years of comparative statements. Assuming an income tax rate of 20% for all years, the effect of thisaccounting change on prior periods after taxes should be reported by a credit ofO $616000 on the 2024 income statement.O $356000 on the 2023 retained earnings statement.O $896000 on the 2023 income statement.O $896000 on the 2024 retained earnings statement.

When a corporation changes its accounting system, the cumulative impact on previous periods must be…

At the beginning of 2024, a construction company that began operations in 202 percentage-of-completion method for accounting purposes but not for tax purp past three years appear below: 2022 2023 2024 Completed-Contract $565000 725000 800000 Percentage-of-Completion $1010000 1050000 1150000

At the beginning of 2024, a construction company that began operations in 202 percentage-of-completion method for accounting purposes but not for tax purp past three years appear below: 2022 2023 2024 Completed-Contract $565000 725000 800000 Percentage-of-Completion $1010000 1050000 1150000

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 Bre-X Inc.'s only temporary difference at the beginning and end of 2022 is caused by a $1.5-million deferred gain for tax purposes on an installment sale of a plant asset. The related receivable (only one half of which is classified as a current asset) is due in equal instalments in 2023 and 2024. The related deferred tax liability at the beginning of the year is $300,000. In Quarter three (3) of 2022, a new tax rate of 24% is enacted into law and is scheduled to become effective for 2024. Taxable income is expected in all future years. Required: a. Determine the amount to be reported as a deferred tax liability at the end of 2022. Indicate its proper classification(s) if Bre-X Inc. uses ASPE guidelines. b. Indicate the classification of the Deferred Tax Asset or Deferred Tax Liability account if Bre-X Inc. uses IFRS guidelines. c. Prepare the journal entry (if any) that is necessary to adjust the deferred tax liability when the new tax rate is enacted into law.
For the year ended December 31, 2024, Fidelity Engineering reported pretax accounting income of $988,000. Selected information for 2024 from Fidelity's records follows: Interest income on municipal governmental bonds $ 44,000 Depreciation claimed on the 2024 tax return in excess of depreciation on the income statement Carrying amount of depreciable assets in excess of their tax basis at year-end Warranty expense reported on the income statement 68,000 112,000 32,000 Actual warranty expenditures in 2024 22,000 Fidelity's income tax rate is 25%. At January 1, 2024, Fidelity's records indicated balances of zero and $11,000 in its deferred tax asset and deferred tax liability accounts, respectively. Required: Determine the amounts necessary to record income taxes for 2024, and prepare the appropriate journal entry. What is Fidelity's 2024 net income?
Blossom Home Inc., a real estate developing company, was accounting for its long-term contracts using the completed contract method prior to 2024. In 2024, it changed to the percentage-of-completion method. The company decided to use the same for income tax purposes. The tax rate enacted is 20%. Income before taxes under both the methods for the past three years appears below. Completed contract Percentage-of-completion 2022 2023 $385000 $261000 685000 323000 2024 A credit to Retained Earnings for $219280 O A debit to Retained Earnings $289600 A credit to Retained Earnings for $289600 A debit to Retained Earnings for $219280 $137000 205000 Which of the following will be included in the journal entry made by Blossom Home to record the income effect after taxes?
1-13 Organizational Expenditures. G Corporation, an accrual basis taxpayer, incurred and paid $41,000 of qualifying organizational expenditures in 2021. Assuming G Corporation wishes to maximize its deductions, compute the maximum amount of organization costs that may be deducted for each of the following years if G Corporation adopts a calendar tax year. For 2021, if G Corporation began business on September 1. Calendar year 2022? Calendar year 2026? How would your answer to (a) change if the $41,000 had been paid in February 2022? How would your answer to (a) change if G Corporation were a cash basis taxpayer and the $41,000 had been paid in February 2022? How would your answer to (a) change if G Corporation had incurred $12,000 of the $41,000 qualified expenditures in January 2022.
Greene Co. has pretax book income for the year ended December 31, 2022 in the amount of $315,000 and has a tax rate of 30%. Depreciation for tax purposes exceeded book depreciation by $10,500.What should Greene Co. record as its deferred tax liability for 2022? Group of answer choices $94,500 $0 $91,350 $3150
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Current Attempt in Progress The following information is available for Bramble Corporation for 2024 (its first year of operations). 1. Excess of tax depreciation over book depreciation, $42,400. This $42,400 difference will reverse equally over the years 2025-2028. 2. Deferral, for book purposes, of $20,300 of rent received in advance. The rent will be recognized in 2025. 3. Pretax financial income, $272,300. 4. Tax rate for all years, 30%. (a) Your answer is correct. Compute taxable income for 2024. Taxable income $ 250200 Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2024. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Income Tax Expense Deferred Tax Asset Deferred Tax Liability Income Tax Payable Debit…
GRADUATED TAX TABLE UNDER TRAIN LAW (January 1, 2018 to December 31, 2022) Over But not over The Tax shall be Plus Of Excess Over 250,000 250,000 400,000 20% 250,000 400,000 800,000 30,000 25% 400,000 800,000 2,000,000 130,000 30% 800,000 2,000,000 8,000,000 490,000 32% 2,000,000 8,000,000 2,410,000 35% 8,000,000
Subject - account
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Subject :- Account At the end of 2024, its first year of operations, Blossom Company prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income $2,890,000 Estimated litigation expense 3890000 Extra depreciation for taxes (5892000) Taxable income $888,000 The estimated litigation expense of $3890000 will be deductible in 2025 when it is expected to be paid. Use of the depreciable assets will result in taxable amounts of $1964000 in each of the next 3 years. The income tax rate is 20% for all years. The deferred tax asset at the end of 2024 to be recognized is