7.Consider the following excerpts from the income statement and tax returns of Rashford Inc.Amounts in $Income before taxesTaxable incomea. 22.4%b. 19.6%Income statementDepreciation200Warranty expenses*120Fine100*Warranty expenditures are tax deductible when payments are made to fulfil the warranty.C. 23.38%d. 17.92%e. None of the above1,500ANSWER: ATax returnsThe statutory tax rate is 21%. There are no temporary or permanent differences other than the oneslisted in the table. The effective tax rate of Rashford Inc. is:?25000

It is the tax rate at which an individual or a corporation is taxable on earned income. The…

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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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Subject:accounting Given the following tax structure, what minimum tax would need to be assessed on Shameika to make the tax progressive with respect to average tax rates? Taxpayer Salary Muni-Bond Interest Total Tax Mihwah $ 25,000 $ 7,300 $ 2,125 Shameika $ 75,000 $ 37,500
Meman
Nalad Corp. provided the following data related to accounting and taxable income: 20X8 20X9 Pre-tax accounting income (financial statements) Taxable income (tax return) $510,000 295,000 40% $495,000 710,000 40% Income tax rate There are no existing temporary differences other than those reflected in these data. There are no permanent differences. Required: 1-a. How much tax expense would be reported in each year if the taxes payable method was used? Tax Expense 20X8 20X9 1-b. What is the implied tax rate? (Round your answers to 1 decimal place.) 20X8 20X9 Implied tax rate
Big Blue Inc. (BBI) listed the following items to prepare a reconciliation between book and taxable income. GAAP net income before tax $ 700,000Entertainment expense 100,000GAAP depreciation expense 90,000Depreciation expense for tax purposes 120,000 a. Compute BBI's tax expense for financial statement purposes.b. Compute BBI's tax payable to the IRS.c. Compute the net increase in BBI's deferred tax assets or deferred tax liabilities for the year.d. Record the journal entry to record taxes for the year.
9
Crystal Critters, Inc., a U.S. GAAP reporter, has the deferred tax assets and liabilities presented below: Item Classification on the Balance Sheet of Related Account Deferred Tax Associated with Item Excess of warranty expense over warranty deductions Current $74,000 Asset Accelerated depreciation for tax purposes Noncurrent $84,000 Liability Installment sales receivable Current $44,000 Liability Contingent liability Current $34,000 Asset Assuming it meets the conditions to net assets and liabilities, how will the company report deferred taxes on the balance sheet? Group of answer choices current asset: deferred tax asset $108,000; noncurrent liability: deferred tax liability $128,000 noncurrent liability: deferred tax liability $20,000 current liability: deferred tax liability $64,000; noncurrent liability: deferred tax liability $84,000 current liability: deferred tax liability $44,000; noncurrent asset: deferred tax asset $84,000
Given the tax rate table below. For a person who has a taxable income of $70,000, what is the average tax rate this person will be charged? Taxable Income 16% 32% 14% 22% Tax Rate 0- 9,525 10% 9,525 38,700 12 38,700- 82,500 22 82,500- 157,500 24 157,500 200,000 32 200,000- 500,000 35 500,000+ 333
(Situational amounts are stated in thousands) Situation 1 Situation 2 Situation 3 Situation 4 $ 85 $ 215 $ 195 $ 260 Taxable income Total Future deductible amounts 15 20 20 Total Future taxable amounts 15 15 30 Balance at beginning of year: Deferred tax asset Deferred tax liability 2 9. 4 The enacted tax rate is 40%. Required: 1. For each situation (1-4), determine your responses for a. through f. and fill in the table appropriately: 1 2 3 4 a. Income taxes payable b. Deferred tax asset balance c. Deferred tax asset change d. Deferred tax liability balance e. Deferred tax liability change f. Income tax expense 2. For each situation, prepare the journal entry for taxes. Situation 1 Situation 2 Situation 3 Situation 4
To compute the provision for income tax, the following 3. What amount of income tax payable should be reported? 4. What amount of total tax expense should be reported: Fecorino Company had pretaxr financial income of P2,500,00g The entity made corporate estimated tax payment in the Tax depreciation in excess of financial statement amount 160,000 Problem 16-30 in the current year. amount of 180, 000 during the current year. information was provided: S60,000 Interest income received Tax depreciation in excess of financial statement amount 280,000 S0% Rent received in advance Corporate tax rate 1. What amount of permanent difference between boo income and taxable income existed at year-end? a. 520,000 b. 360,000 c. 800,000 d. 280,000 2. What amount of current tax expense should be reported? a. 786,000 b. 510,000 c. 750,000 d. 678,000 3. What amount of income tax pavable should be reporer a. 498,000 b. 606,000 c. 330,000 d. 570,000 a. 714,000 b. 726,000 c. 642,000 d. 594,000
Micro Limited has shown a prepaid rent balance of $8,000 under current assets in their balance sheet. The tax rate is 30%. The deferred tax item to be recognised by Micro Limited is: Select one: a. Deferred tax asset of $2,400. b. Deferred tax liability of $2,400. c. Deferred tax liability of $8,000. d. Deferred tax asset of $8,000.
1. What is the tax due and payable amount in fiscal year 20x1? Fiscal year June 20, 20x1 (5th year) 20x2 Sales 80,000,000 75,000,000 Cost of Sales 50,000,000 46,875,000 Allowable Deductions excluding NOLCO 32,000,000 25,000,000 2. Using the information above, how much is tax due in fiscal year 20x2?
Am.101.

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