At the end of 2024, Pharoah Company has $181,100 of cumulative temporary differences that will result in reporting the followingfuture taxable amounts.2025202620272028$59,80051.10039,00031.200$181.100Tax rates enacted as of the beginning of 2023 are:2023 and 20242025 and 20262027 and later40%30%25%h7074 is $316,200. Taxable income is expected in all future years.

The objective of the question is to calculate the deferred tax liability for Pharoah Company at the…

Answered: At the end of 2024, Pharoah Company has…

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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Carla Corporation has a cumulative temporary difference related to depreciation of $556,000 at December 31, 2025. This difference will reverse as follows: 2026, $39.000; 2027, $226.000; and 2028, $291,000. Enacted tax rates are 17% for 2026 and 2027, and 20% for 2028. Compute the amount Carla should report as a deferred tax liability at December 31, 2025. Deferred tax liability at December 31, 2025 $
The pretax financial income of x company differs from its taxable income throughout each of 4 years as follows Year. Pretax Financial Income. Taxable income. Tax rate 2020. 305,000. 173,000. 35% 2021. 349,000. 216,000. 20% 2022 358,000 277,000 20% 2023 429,000 615,000 20% Pretax fiancial income for each year includes a nondeductible exense of $29,100 (never deductible for tax purposes) The remainder of the difference between pretax fiancial income and taxable income in each period is due to one depreciation temporary difference. No deferred income taxes existed at the beginning of 2020. Prepare journal entries to record income taxes in all 4 years. Assume that the change in the tax rate to 20% was not enacted until the beginning of 2021
Exercise 19.8 (Two Temporary Differences, One rate, 3 years). Button Company has the following two temporary differences between its income tax expense and income taxes payable. 2020 2021 2022 Pretax Financial Income $840,000 $910,000 $945,000 Excess Depreciation Expense on tax Return (30,000) (40,000) (10,000) Excess Warranty Expense in Financial Income 20,000 10,000 8,000 Taxable Income $830,000 $880,000 $943,000 The income tax rate is 20% for all years. Instructions: a) Assuming there were no temporary differences prior to 2020, prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020,2021, and 2022. b) Indicate how deferred taxes will be reported on the 2022 balance sheet. Button’s product warranty is for 12 months. Deferred tax asset ( $ 0 + $ 0 + $ 0 )..............................$ 0 Deferred tax liability ( $ 0 + $ 0 + $ 0…
Apple Corporation prepared the following reconciliation for its first year of operations: Pretax financial income for 2020- P1,200,000 - Tax exempt interest - P100,000 - Taxable temporary difference - P300,000 The temporary difference will reverse evenly over the next two years at an enacted tax rate of 40%. The enacted tax rate for 2020 is 28%. What amount should be reported in its 2020 income statement as the current portion of its provision for income taxes? A.P480,000B.P320,000C.P224,000D.P336,000
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Wildhorse Company has the following two temporary differences between its income tax expense and income taxes payable. 2025 2026 2027 Pretax financial income $820,000 $927,000 $912,000 Excess depreciation expense on tax return (28,700) (42,000) (9,700) Excess warranty expense in financial income Taxable income 20,100 10,400 7,800 $811,400 $895,400 $910,100 The income tax rate for all years is 20%. (a) Your answer is partially correct. Assuming there were no temporary differences prior to 2025, prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2025, 2026, and 2027. (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. Record journal entries in the order presented in the problem.)
Trey, Inc. reports a taxable loss of 5210.000 for 2022. Its taxable income for the last two years was as föllows: 2020 2021 $60,000 80,000 Trey expects tavable income in future years and has a tax rate of 30% for all periods affected. The amount that Trey, Inc. reports as a net loss for Inardal reporting purposes in 2022 is: Seet one 74 ST00000 loss 0 S108000 loss OL 147000 loss 04 ST0000 loss O210000 loss
30. Wildhorse Co. at the end of 2020, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income $1470000 Estimated litigation expense 3450000 Installment sales (2760000) Taxable income $2160000 The estimated litigation expense of $3450000 will be deductible in 2022 when it is expected to be paid. The gross profit from the installment sales will be realized in the amount of $1380000 in each of the next two years. The estimated liability for litigation is classified as noncurrent and the installment accounts receivable are classified as $1380000 current and $1380000 noncurrent. The income tax rate is 20% for all years.The deferred tax asset to be recognized is $0. $138000 noncurrent. $690000 noncurrent. $138000 current.
PT BCD has a deferred tax asset account with a balance of Rp300.000 at the end of 2018 due to a single cumulative temporary difference of Rp750.000. At the end of 2019, this same temporary difference has increased to a cumulative amount of Rp1.000.000. Taxable income for 2019 is Rp1.700.000. The tax rate is 40% for all years. Assuming it’s probable that 70% of the deferred tax asset will be realized, what amount will be reported on ABC’s statement of financial position for the deferred tax asset at December 31, 2019?
Sunland Corporation has one temporary difference at the end of 2025 that will reverse and cause taxable amounts of $56,200 in 2026, $61,000 in 2027, and $66,500 in 2028. Sunland's pretax financial income for 2025 is $285,200, and the tax rate is 30% for all years. There are no deferred taxes at the beginning of 2025. Your answer is correct. Compute taxable income and income taxes payable for 2025. Taxable income Income taxes payable $ eTextbook and Media List of Accounts Your answer is partially correct. $ Account Titles and Explanation Income Tax Expense Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2025. (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 O for the amounts.) Deferred Tax Liability Income Tax Payable 101500 30450 Debit I Credit 30450
Tamarisk Enterprises Ltd., a private company following ASPE earned accounting income before taxes of $1,717,000 for the year ended December 31, 2023. During 2023, Tamarisk paid $250,000 for meals and entertainment expenses. In 2020, Tamarisk's tax accountant made a mistake when preparing the company's income tax return. In 2023, Tamarisk paid $18,000 in penalties related to this error. These penalties were not deductible for tax purposes. Tamarisk owned a warehouse building for which it had no current use, so the company chose to use the building as a rental property. At the beginning of 2023, Tamarisk rented the building to SPK Inc. for two years at $260,000 per year. SPK paid the entire two years rent in advance. Tamarisk used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $404,000. For tax purposes, Tamarisk claimed the maximum capital cost allowance of $629,000. Tamarisk began to sell its products with a two-year warranty against…
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