The information that follows pertains to Richards Refrigeration, Inc.:a. At December 31, 2021, temporary differences existed between the financial statement book values and the tax bases of thefollowing:Buildings and equipment (net of accumulated depreciation)Prepaid insuranceLiability-loss contingencyb. No temporary differences existed at the beginning of 2021.BookValue$160TaxBasis$110($ in millions)Future Taxable(Deductible)Amount$ 50707045(45)c. Pretax accounting income was $220 million and taxable income was $145 million for the year ended December 31, 2021. The taxrate is 25%.Required:1. Complete the following table given below and prepare the appropriate journal entry to record income taxes for 2021.2. What is the 2021 net income?Complete this question by entering your answers in the tabs below.Required 1CalculationRequired 1 GJ Required 2Complete the following table given below to record income taxes for 2021. (Enter your answers in millions rounded to 2 decimal places(i.e., 5,500,000 should be entered as 5.50). Negative amounts should be entered with a minus sign.)Pretax accounting incomePermanent differences($ in millions) X Tax Rate %$220.00Tax $Income subject to taxationTemporary DifferencesDepreciationPrepaid insurance220.00X=$0.00X=X=Liability - loss contingencyX=Income taxable in current year$220.00Required 1 CalculationRecorded as:Required 1 GJ >

Income tax payable:The tax amount that is due to the government or tax authority is called income…

Buildings and equipment (net of accumulated depreciation) Prepaid insurance Liability-loss contingency b. No temporary differences existed at the beginning of 2021. Book Tax Value Basis Future Taxable (Deductible) Amount $160 $110 70 0 $ 50 70 45 (45) c. Pretax accounting income was $220 million and taxable income was $145 million for the year ended December 31, 2021. The tax rate is 25%.

Buildings and equipment (net of accumulated depreciation) Prepaid insurance Liability-loss contingency b. No temporary differences existed at the beginning of 2021. Book Tax Value Basis Future Taxable (Deductible) Amount $160 $110 70 0 $ 50 70 45 (45) c. Pretax accounting income was $220 million and taxable income was $145 million for the year ended December 31, 2021. The tax rate is 25%.

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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The following facts relate to Sage Corporation. 1. 2. 3. 4. 5. 6. 7. 8. Deferred tax liability, January 1, 2020, $44,400. Deferred tax asset, January 1, 2020, $0. Taxable income for 2020, $105,450. Pretax financial income for 2020, $111,000. Cumulative temporary difference at December 31, 2020, giving rise to future taxable amounts, $266,400. Cumulative temporary difference at December 31, 2020, giving rise to future deductible amounts, $38,850. Tax rate for all years, 20%. The company is expected to operate profitably in the future.. Compute income taxes payable for 2020. Income taxes payable $ eTextbook and Media List of Accounts Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020. (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) Account Titles and Explanation Sage Corporation…
vn.2 At the end of the year, the deferred tax asset account had a balance of $8 million attributable to a temporary difference of $32 million in a liability for estimated expenses. Taxable income is $88 million. No temporary differences existed at the beginning of the year, and the tax rate is 25%.Prepare the journal entry(s) to record income taxes, assuming it is more likely than not that three-fourths of the deferred tax asset will not ultimately be realized.
The following facts relate to Crane Corporation. Deferred tax liability, January 1, 2025, $30,600. Deferred tax asset, January 1, 2025, $10,200. Taxable income for 2025,$107,100. Cumulative temporary difference at December 31,2025 , giving rise to future taxable amounts, $234,600. Cumulative temporary difference at December 31,2025 , giving rise to future deductible amounts, $96,900. Tax rate for all years, 20%. No permanent differences exist. The company is expected to operate profitably in the future. (a) Compute the amount of pretax financial income for 2025. Pretax financial income $
Metlock reported the following pretax financial income (loss) for the years 2020-2022. 2020 $117,600 2021 (139,000) 2022 176,400 Pretax financial income (loss) and taxable income (loss) were the same for all years involved. The enacted tax rate was 20% for 2020- 2022.
A company prepared the following reconciliation for 2021: Pretax financial income for 2021 $719,000 Originating temporary difference 19,000 Permanent difference (38,000) Taxable income $xxxx (Figure this amount out on your own. Note: the parentheses outside the permanent difference mean subtraction). The temporary difference will reverse evenly over the next two years (i.e., 2022 and 2023). The enacted income tax rates are…
Arndt, Inc. reported the following for 2021 and 2022 ($ in millions): 2021 2022 Revenues $ 888 $ 980 Expenses Pretax accounting income (income statement) Taxable income (tax return) 760 800 $ 128 $ 116 $ 180 $ 200 Tax rate: 25% a. Expenses each year include $30 million from a two-year casualty insurance policy purchased in 2021 for $60 million. The cost is tax deductible in 2021. b. Expenses include $2 million insurance premiums each year for life insurance on key executives. c. Arndt sells one-year subscriptions to a weekly journal. Subscription sales collected and taxable in 2021 and 2022 were $33 million and $35 million, respectively. Subscriptions included in 2021 and 2022 financial reporting revenues were $25 million ($10 million collected in 2020 but not recognized as revenue until 2021) and $33 million, respectively. Hint View this as two temporary differences-one reversing in 2021; one originating in 2021. d. 2021 expenses included a $14 million unrealized loss from reducing…
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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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The information that follows pertains to Esther Food Products: a. At December 31, 2024, temporary differences were associated with the following future taxable (deductible) amounts: Depreciation Prepaid expenses Warranty expenses b. No temporary differences existed at the beginning of 2024. c. Pretax accounting income was $46,000 and taxable income was $9,000 for the year ended December 31, 2024. d. The tax rate is 25%. Required: Complete the following table given below and prepare the appropriate journal entry to record income taxes for 2024. Complete this question by entering your answers in the tabs below. Calculation General Journal $ 32,000 11,000 (6,000) Complete the following table given below to record income taxes for 2024. Note: Amounts to be deducted should be entered with a minus sign. Description Pretax accounting income Permanent differences Income subject to taxation Temporary Differences Income taxable in current year $ Amount 46,000 X Tax Rate = x X Recorded as:
Save & Exit Subm Two independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences: SITUATION Taxable income Amounts at year-end: Future deductible amounts 2. $46,000 $86,000 5,600 10,600 0 5,600 Future taxable amounts Balances at beginning of year, dr (cr): Deferred tax asset, Deferred tax liability $ 1,000 $ 3,180 0 1,000 The enacted tax rate is 30% for both situations. Required: For each situation determine the: SITUATION 2. (a.) Income tax payable currently. (b.) Deferred tax asset - balance at year-end. (c.) Deferred tax asset change dr or (cr) for the year. (d.) Deferred tax liability - balance at year-end. (e.) Deferred tax liability change dr or (cr) for the year. (f.) Income tax expense for the year. Next > 31 of 39