Bee Corp. prepared the following reconciliation between book income and taxable income for the year ended December 31, 20x0: Pretax accounting income 500,000 Taxable income 300,000 Difference 200,000 Interest on municipal bonds 50,000 Lower depreciation per financial statements 150,000 Total differences 200,000 Bee's effective income tax rate for 20x0 is 30%. The depreciation difference will reverse equally over the next three years at enacted tax rates as follows: Years Tax rates 20x1 30% 20x2 25% 20x3 25% In Bee's 20x0 income statement, the current portion of its provision for income taxes should be 125,000 150,000 75,000 90,000

Bee Corp. prepared the following reconciliation between book income and taxable income for the year ended December 31, 20x0: Pretax accounting income 500,000 Taxable income 300,000 Difference 200,000 Interest on municipal bonds 50,000 Lower depreciation per financial statements 150,000 Total differences 200,000 Bee's effective income tax rate for 20x0 is 30%. The depreciation difference will reverse equally over the next three years at enacted tax rates as follows: Years Tax rates 20x1 30% 20x2 25% 20x3 25% In Bee's 20x0 income statement, the current portion of its provision for income taxes should be 125,000 150,000 75,000 90,000

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter12: Liabilities: Off-balance-sheet Financing, Retirement Benefits, And Income Taxes

Section: Chapter Questions

Problem 26E

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Bee Corp. prepared the following reconciliation between book income and taxable income for the year ended December 31, 20x0: Pretax accounting income      500,000 Taxable income      300,000 Difference      200,000 Interest on municipal bonds        50,000 Lower depreciation per financial statements      150,000 Total differences      200,000 Bee's effective income tax rate for 20x0 is 30%. The depreciation difference will reverse equally over the next three years at enacted tax rates as follows:             Years           Tax rates 20x1               30% 20x2               25% 20x3               25% In Bee's 20x0 financial statements, the deferred portion of its provision for income taxes should be 40,000 50,000 45,000 60,000
Mabuhay Company prepared the following reconciliation of income per book with income per tax return for the year ended December 31, 2006Book income before tax, 750,000Add temporary difference:       Construction revenue which will reverse in 2007, 100,000Deduct temporary difference:    Depreciation expense which will reverse in equal amounts    in each of the next four years, (400,000)Taxable income, 450,000The income tax rate is 35%.What amount should Mabuhay report in its 2006 income statement as the current provision for income tax?a. 157,500 b. 262,500 c. 297,500 d. 367,500
Caramel Corp. prepared the following reconciliation of income per books with income per tax return for the year ended December 31, 2021: Book income before income taxes     2,700,000.00 Add temporary difference      Installment revenue which will reverse in 2022        240,000.00 Deduct temporary difference Depreciation expense which will reverse in equal amounts in each of the next four years       (960,000.00) Taxable income     1,980,000.00    Caramel Corp effective income tax rate is 25% for 2021. What amount should Caramel Corp report in its 2021 income statement as the current provision for income tax expense?
12) Ehrlich Corporation prepared the following reconciliation for its first year of operations: Pretax financial income for 2021 $2,550,000 Excess depreciation expense (450,000) Taxable income $2,100,000 The temporary difference will reverse evenly over the next two years at an enacted tax rate of 30%. The enacted tax rate for 2021 is 20%. Prepare the journal entry for the income taxes for 2021
The following is governed by an income tax rate of 25% . Depreciation rate is determined using MACRS A company is considering two alternatives Choice 1 : Amachine is purchased for 60,000. It is a 5 year property class. It will be used for 10 years after which it will have a salvage value of 15,000. It is mostly grey with a metallic steel cover. The Before Tax Cash Flow will be 80,000 per year. The machine is purchased from Retained Earning cash outright. It has no extra deductions associated with it. Choice 2: A machine is purchased for 65,000. It is a 10 year property class object. It will be used for 12 years with a salvage value of 18,000. It is mostly blue with a white cover. The Before Tax Cash Flow will be 86,000 per year. The machine is purchased from Retained Earnings Cash Outright. It receives an additional allowance for environmental effects of 5000/yr. The allowance is not taxed. and is not included in the 86,000 BTCF.
10. Sheridan Corp. prepared the following reconciliation of income per books with income per tax return for the year ended December 31, 2021: Book income before income taxes $ 2630000 Add temporary difference Construction contract revenue which will reverse in 2022 233000 Deduct temporary difference Depreciation expense which will reverse in equal amounts in each of the next four years ( 943200) Taxable income $ 1919800 Sheridan's effective income tax rate is 25% for 2021. What amount should Sheridanreport in its 2021 income statement as the current provision for income taxes? A) $ 479950 B) $ 657500 C) $ 715750 D) $ 58250
A reconciliation of pretax financial statement income to taxable income is shown below for See Shipping for the year ended December 31, 2018, its first year of operations. The income tax rate is 40%. Pretax accounting income (income statement) $ 600,000 Installment income taxable upon receipt next year (30,000 ) Warranty expense in excess of deductible amount 5,000 Tax depreciation in excess of income statement amount (20,000 ) Taxable income (tax return) $ 555,000 What amount should See report as a noncurrent item related to deferred income taxes in its 2018 balance sheet? A) Deferred income tax asset of $18,000. B) Deferred income tax liability of $20,000. C) Deferred income tax liability of $45,000. D) Deferred income tax liability of $18,000
At the end of the year, Huskies Together Company has pretax financial income of $550,000. Included in the $550,000 is $70,000 interest income on municipal bonds, $25,000 fine for dumping hazardous waste, and depreciation of $60,000. Depreciation for tax purposes is $45,000. Compute income taxes payable, assuming the tax rate is 30% for all periods. Prepare the journal entry at the end of the year.
The 2020 financial statements for Leggett & Platt, Inc. report the following information: Year ended December 31, 2020 (In millions) Depreciation expense $84.6 Net income 275.6 Equipment 620.3 Building 1071.7 Land 37.7 Accumulated depreciation and 1.165.4 amortization 564.3 PPE, net
For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Pretax accounting income $ 300,000 Permanent difference (15,000 ) 285,000 Temporary difference-depreciation (20,000 ) Taxable income $ 265,000 Tringali's tax rate is 25%. Assume that no estimated taxes have been paid. What should Tringali report as its deferred income tax liability as of the end of its first year of operations?
Sand engaged in operations at the start of 20X1 and reported $550,000 in pre-tax book income for the year. Tax depreciation for Sand exceeded book depreciation by $50,000. The tax rate for 20X1 was 25%, and Congress had enacted a tax rate of 21% for the years after 20X1. The journal entry to record the taxes for Sand Company at December 31, 20X1 would be: Multiple Choice O O DR Income tax expense 125,000 CR Cash 125,000 DR Income tax expense 135,500 CR Deferred tax liability 10,500 CR Income tax payable 125,000- DR Income tax expense 135,500 CR Cash 135,500 DR Income tax expense 146,000 CR Deferred tax liability 10,500 CR Income tax payable 135,500
For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Pretax accounting income $ 300,000 Permanent difference (15,000 ) 285,000 Temporary difference-depreciation (20,000 ) Taxable income $ 265,000 Tringali's tax rate is 25%. Assume that no estimated taxes have been paid. What should Tringali report as income tax payable for its first year of operations?