Calculating Deferred Tax Balance Evergreen Company's reconciliation between pretax GAAP income and taxable income follows for the year. Pretax GAAP income $240,000 (48,000). Depreciation adjustment Permanent difference 1,500 $193,500 Taxable income The company had one temporary difference due to the GAAP basis of equipment exceeding the tax basis of equipment. Record the income tax journal entry for the year, assuming a tax rate of 25%. Assume that the January 1 deferred tax liability balance was $6,000. • Note: Round amounts to the nearest whole dollar. Date Dec. 31 Account Name Income Tax Expense Deferred Tax Liability Income Tax Payable To record income tax expense. > > > Dr. ooo 0 0 Cr. 0x 11,625 x 48,375 ✔

Calculating Deferred Tax Balance Evergreen Company's reconciliation between pretax GAAP income and taxable income follows for the year. Pretax GAAP income $240,000 (48,000). Depreciation adjustment Permanent difference 1,500 $193,500 Taxable income The company had one temporary difference due to the GAAP basis of equipment exceeding the tax basis of equipment. Record the income tax journal entry for the year, assuming a tax rate of 25%. Assume that the January 1 deferred tax liability balance was $6,000. • Note: Round amounts to the nearest whole dollar. Date Dec. 31 Account Name Income Tax Expense Deferred Tax Liability Income Tax Payable To record income tax expense. > > > Dr. ooo 0 0 Cr. 0x 11,625 x 48,375 ✔

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 Stone Inn earned $167,284 in taxable income for the year. How much tax does the company owe on this income? TxableIncome 60.000 Tox Rale 18% 50.001- 75.000 75.001-100.000 100.001- 35.000 335.001- 10,000,000 a. $46,311.02 b. $48,490.76 c. $54,519.27 d. $65,240.76
Information relating to Waukegan Company for the current year is as follows: Income from continuing operations before tax $ 140,000 Income from discontinued operations (pretax) 40,000 What is the amount of the income tax expense that should be allocated to the income from discontinued operations? (Assume the effective tax rate is 25%) income tax expense
For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Pretax accounting income $ 290,000 Permanent difference (15,000 ) 275,000 Temporary difference-depreciation (20,100 ) Taxable income $ 254,900 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? $20,100. $35,100. $5,025. $8,775.
Dry Valley Corporation reported the following items in its adjusted trial balance for the year ended December 31, 2026: Income from continuing operations before income taxes Gain on disposal of discontinued component Loss from operations of discontinued component Dry Valley is subject to a 20% tax rate. Instructions $120,000 28,000 (60,000) Prepare the December 31, 2026, income statement for Dry Valley Corporation, starting with income from continuing operations before income taxes.
Range Rover Inc. had taxable income of $152,000 for the year. The GAAP basis of accounts receivable (net) $9,600 less than the tax basis of accounts receivable. Assuming a tax rate of 25%, record the income tax journal entry on December 31. Assume zero beginning balances in deferred tax accounts Note: faline in a journal entry ant required for the transaction select N/A as the account names and leave the Dr. and Cr. answers blank (zero) Dr. Account Name Date Dec 31 income Tax Expose Income Tax Payate Deferred Tax Asset Tocesant income
For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Pretax accounting income $220,000 Permanent difference (14,200) 205,800 Temporary difference - depreciation (21,000) Taxable income $ 184,800 Tringali's tax rate is 25 %. Assume that no estimated taxes have been paid. What should Tringali report as its income tax expense for its first year of operations?
Dix Company reported operating income (loss) before income tax in its first three years of operations as follows: 20X1 $ 100,000 20X2 (200,000 ) 20X3 240,000 Dix had no permanent or temporary differences between book income and taxable income in these years. Assume a 21% tax rate for all years, and assume there is no valuation allowance. Required: What amount of taxes does Dix pay related to its 20X3 tax return?
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Recording and Reporting Temporary and Permanent Differences The records of Lane Corporation show the following pretax GAAP income for the past 4 years. Year 1 Year 2 Year 3 Year 4 Pretax GAAP income $90,000 $92,000 $95,000 $98,000 The income tax rate is 25%. The company had the following differences between GAAP basis and tax basis income. For GAAP purposes, installment sales receivable is $30,000 on December 31 of Year 1. On the tax return, $10,000 will be recognized each year, Year 2 through Year 4, as cash is collected. •For GAAP purposes, warranty expenses of $4,000 are accrued in Year 1. On the tax return, $1,000 will be deducted each year, Year 1 through Year 4, as expenditures are made related to warranties. The company also recorded interest revenue of $1,250 each year on municipal bonds, which is not taxable. Required Schedules Journal Entries Financial Statement Presentation c. Prepare the journal entries to record income tax expense for Year 1, Year 2, Year 3, and Year 4.…
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?
Stone Company reported pre-tax book income of $700,000 in 20X1, the first year of operation. The tax depreciation exceeded the book depreciation by $90,000. The tax rate for 20X1 and all future years was 21%. What amount of deferred tax liability should Stone report in its December 31, 20X1, balance sheet? Select one: a. $6,300 b. $14,000 c. $18,900 d. $3,500
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