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Calculate cumulative temporary differences for years 2020-2022. (Negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. 2020 2021 2022 Cumulative temporary difference 57600 28,800 Calculate current tax expense for years 2020-2022. Current tax (expense v for 2020 51840 Current tax expense v for 2021 25920 25920 Current tax expense v for 2022 Calculate deferred tax expense for 2020-2022. Deferred tax Texpense v for 2020 Deferred tax benefit v for 2021 Deferred tax benefit for 2022

Calculate cumulative temporary differences for years 2020-2022. (Negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. 2020 2021 2022 Cumulative temporary difference 57600 28,800 Calculate current tax expense for years 2020-2022. Current tax (expense v for 2020 51840 Current tax expense v for 2021 25920 25920 Current tax expense v for 2022 Calculate deferred tax expense for 2020-2022. Deferred tax Texpense v for 2020 Deferred tax benefit v for 2021 Deferred tax benefit for 2022

FINANCIAL ACCOUNTING
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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Problem 19-07 (Part Level Submission) Pharoah Corp. sold an investment on an installment basis. The total gain of $86,400 was reported for financial reporting purposes in the period of sale. The company qualifies to use the installment-sales method for tax purposes. The installment period is 3 years; one-third of the sale price is collected in the period of sale. The tax rate was 40% in 2020, and 20% in 2021 and 2022. The 20% tax rate was not enacted in law until 2021. The accounting and tax data for the 3 years is shown below. Financial Accounting Tax Return 2020 (40% tax rate) Income before temporary difference $100,800 $100,800 Temporary difference 86,400 28,800 Income $187,200 $129,600 2021 (20% tax rate) Income before temporary difference $100,800 $100,800 Temporary difference 28,800 Income $100,800 $129,600 2022 (20% tax rate) Income before temporary difference $100,800 $100,800 Temporary difference 28,800 Income $100,800 $129,600
Transcribed Image Text:Problem 19-07 (Part Level Submission) Pharoah Corp. sold an investment on an installment basis. The total gain of $86,400 was reported for financial reporting purposes in the period of sale. The company qualifies to use the installment-sales method for tax purposes. The installment period is 3 years; one-third of the sale price is collected in the period of sale. The tax rate was 40% in 2020, and 20% in 2021 and 2022. The 20% tax rate was not enacted in law until 2021. The accounting and tax data for the 3 years is shown below. Financial Accounting Tax Return 2020 (40% tax rate) Income before temporary difference $100,800 $100,800 Temporary difference 86,400 28,800 Income $187,200 $129,600 2021 (20% tax rate) Income before temporary difference $100,800 $100,800 Temporary difference 28,800 Income $100,800 $129,600 2022 (20% tax rate) Income before temporary difference $100,800 $100,800 Temporary difference 28,800 Income $100,800 $129,600
Calculate cumulative temporary differences for years 2020-2022. (Negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) 2020 2021 2022 Cumulative temporary difference 57600 28,800 Calculate current tax expense for years 2020-2022. Current tax expense v for 2020 51840 Current tax expense V for 2021 25920 Current tax expense v for 2022 25920 Calculate deferred tax expense for 2020-2022. Deferred tax expense v for 2020 Deferred tax [ benefit for 2021 Deferred tax[ benefit for 2022
Transcribed Image Text:Calculate cumulative temporary differences for years 2020-2022. (Negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) 2020 2021 2022 Cumulative temporary difference 57600 28,800 Calculate current tax expense for years 2020-2022. Current tax expense v for 2020 51840 Current tax expense V for 2021 25920 Current tax expense v for 2022 25920 Calculate deferred tax expense for 2020-2022. Deferred tax expense v for 2020 Deferred tax [ benefit for 2021 Deferred tax[ benefit for 2022
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