Calculating Deferred Income Taxes. The Harmon Corporation prepared the following income statements and income tax returns for Year 1 through Year 4. Income Statement Year 1 Year 2 Year 3 Year 4 Sales... $1,000 $1,000 $1,000 $1,000 Operating expenses 650 650 650 650 Pretax net income. 350 350 350 350 Provisions for income taxes 140 140 140 140 Net income $ 210 $ 210 $ 210 $ 210 Income Tax Return Year 1 Year 2 Year 3 Year 4 Sales.... $1,000 $1,000 $1,000 $1,000 Operating expenses . 900 900 400 400 Taxable income 100 100 600 600 Income tax payable 80 80 200 200 After-tax net income $ 20 2$ 20 $ 400 $ 400

Calculating Deferred Income Taxes. The Harmon Corporation prepared the following income statements and income tax returns for Year 1 through Year 4. Income Statement Year 1 Year 2 Year 3 Year 4 Sales... $1,000 $1,000 $1,000 $1,000 Operating expenses 650 650 650 650 Pretax net income. 350 350 350 350 Provisions for income taxes 140 140 140 140 Net income $ 210 $ 210 $ 210 $ 210 Income Tax Return Year 1 Year 2 Year 3 Year 4 Sales.... $1,000 $1,000 $1,000 $1,000 Operating expenses . 900 900 400 400 Taxable income 100 100 600 600 Income tax payable 80 80 200 200 After-tax net income $ 20 2$ 20 $ 400 $ 400

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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