Blossom Company has the following cumulative taxable temporary differences: 12/31/22 $3520000 12/31/21 $2500000 The tax rate enacted for 2022 is 30%, while the tax rate enacted for future years is 20%. Taxable income for 2022 is $6300000 and there are no permanent differences. Blossom's pretax financial income for 2022 is O $7320000 O $5280000. O $2780000. O $9820000.

Blossom Company has the following cumulative taxable temporary differences: 12/31/22 $3520000 12/31/21 $2500000 The tax rate enacted for 2022 is 30%, while the tax rate enacted for future years is 20%. Taxable income for 2022 is $6300000 and there are no permanent differences. Blossom's pretax financial income for 2022 is O $7320000 O $5280000. O $2780000. O $9820000.

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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Sandhill Company has the following cumulative taxable temporary differences: 12/31/21 12/31/20 $2000000 $2650000 The tax rate enacted for 2021 is 30%, while the tax rate enacted for future years is 20%. Taxable income for 2021 is $4800000 and there are no permanent differences. Sandhill’s pretax financial income for 2021 is: $6800000 $2800000 $4800000 $4150000
The pretax financial income of Tamarisk Company differs from its taxable income throughout each of 4 years as follows. Year PretaxFinancial Income Taxable Income Tax Rate 2020 $295,000 $180,000 35 % 2021 320,000 217,000 20 % 2022 335,000 264,000 20 % 2023 435,000 592,000 20 % Pretax financial income for each year includes a nondeductible expense of $29,300 (never deductible for tax purposes). The remainder of the difference between pretax financial income and taxable income in each period is due to one depreciation temporary difference. No deferred income taxes existed at the beginning of 2020.
D E F G H (Deferred Tax Asset with and without Valuation Account) Nova Sci, Inc. has a deferred tax asset account with a balance of $255,000 at the end of 2024 due to a single cumulative temporary difference. At the end of 2025 this same temporary difference has decreased to a cumulative amount of $750,000. Taxable income for 2025 is $650,000. The tax rate is 20% for all years. No valuation account related to the deferred tax asset is in existence at the end of 2024. Instructions (a) Record income tax expense, deferred income taxes, and income taxes payable for 2025, assuming that it is more likely than not that the deferred tax asset will be realized. (b) Assuming that it is more likely than not that one-half of the deferred tax asset will not be realized, prepare the journal entry at the end of 2025 to record the valuation account. (b) NOTES & COMPUTATIONS AREA
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