Cullumber Company deducts insurance expense of $246000 for tax purposes in 2025, but the expense is not yet recognized foraccounting purposes. In 2026, 2027, and 2028, no insurance expense will be deducted for tax purposes, but $82000 of insuranceexpense will be reported for accounting purposes in each of these years. Cullumber Company has a tax rate of 20% and income taxespayable of $204000 at the end of 2025. There were no deferred taxes at the beginning of 2025. What is the deferred tax liability at theend of 2025?O $408000000$49200$21000O $0

Step 1: Identify the insurance expense deducted for tax purposes in 2025.Step 2: Note that this…

Answered: Cullumber Company deducts insurance…

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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In 2022 Charmed, Inc. recorded book income of $420,000. The company's only temporary difference relates to a $66,000 installment sale that it recorded for book purposes; there are no permanent differences. Charmed anticipates receiving payments equally over the following three years. The current enacted tax rate in 2022 is 39%. The substantively enacted tax rates for the following three years are 34%, 39%, and 47%, respectively.Under IFRS, what deferred tax amount should Charmed record for this temporary difference? Group of answer choices $31,020 $26,400 $24,640 $25,740
For 2022, MSU Corporation has $500,000 of adjusted taxable income, $22,000 of business interest income, and $120,000 of business interest expense. It has average annual gross receipts of more than $27,000,000 over the prior three taxable years. a. What is MSU's interest expense deduction for 2022? b. How much interest expense can be deducted for 2022 if MSU's adjusted taxable income is $300,000?
At December 31, 2022 Mindoro Corporation’s taxable profit is P5,000,000. The following items are the temporary differences that caused Mindoro’s income in the income tax return to differ from the amount reported in the income statement: Future deductible amounts expected to reverse in 2023 of P400,000 and future taxable amounts expected to reverse in 2023 and 2024 of P500,000 and P900,000, respectively. Mindoro’s income tax rate is 35%. The income tax expense reported by Mindoro in its December 31, 2022 income statement is a. P2,100,000 c. P1,750,000 b. P1,400,000 d. P1,785,000
Force Corporation has one temporary difference at the end of 2020 that will reverse and cause taxable amounts of $36,000 in 2021, $45,500 in 2022, and $50,000 in 2023. Force's pretax financial income for 2020 is $196,000, and the tax rate is 30% for all years. There are no deferred taxes at the beginning of 2020. 1. Compute taxable income and income taxes payable for 2020. 2. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020.
At December 31, 2020 Sunland Corporation reported a deferred tax liability of $210000 which was attributable to a taxable temporary difference of $740000. The temporary difference is scheduled to reverse in 2024. During 2021, a new tax law increased the corporate tax rate from 20% to 30%. Sunland should record this change by debiting
ABC received $17164 of cash that was included in revenues in its 2017 financial statements, $12014.8 of this will not be taxable until 2018. ABC's enacted tax rate is 23% for 2017, and 27% for 2018. What amount should ABC report in its 2017 balance sheet for deferred income tax liability? Answer:
Lance Lawn Services reports warranty expense by estimating the amount that eventually will be paid to satisfy warranties on its product sales. For tax purposes, the expense is deducted when the warranty work is completed. At December 31, 2021, Lance has a warranty liability of $2 million and taxable income of $80 million. At December 31, 2020, Lance reported a deferred tax asset of $461,000 related to this difference in reporting warranties, its only temporary difference. The enacted tax rate is 25% each year. Required:Prepare the appropriate journal entry to record Lance’s income tax provision for 2021.
Swifty Corporation recorded warranty accruals as at December 31, 2020 in the amount of $151,800. This reversing difference will cause deductible amounts of $50,300 in 2021, $36,000 in 2022, and $65,500 in 2023. No other reversing difference exists. Swifty’s accounting income for 2020 is $144,000 and $175,000 in each of 2021 and 2022 and the tax rate is 25%. There are no deferred tax accounts at the beginning of 2020. Swifty Corporation was informed on December 31, 2021 that the enacted rate for 2022 and subsequent years is 28%. Calculate the deferred tax balances at December 31, 2021, and 2022. 2021 2022 Deferred tax asset $ $ eTextbook and Media List of Accounts Calculate taxable income and income tax payable for 2021 and 2022. 2021 2022 Taxable income $ $ Income tax payable $ $
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At the beginning of 2021, Pitman Co. had pretax financial income of $1,200,000. Additionally, there was a timing difference of $300,000 due to an accounts receivable that will not be collected until the following year. The tax rate us 30%. A. Calculate the total taxable income for 2021. B. Calculate Income tax expense, income tax payable, and the deferred amount for 2021, and create the journal entry.
During 2024, its first year of operations, Baginski Steel Corporation reported a net operating loss of $405,000 for financial reporting and tax purposes. During 2025, Baginski reported income of $225,000 for financial reporting and tax purposes. The enacted tax rate is 25%. Required: Prepare the journal entry to recognize Baginski’s 2025 tax expense or tax benefit. Show the lower portion of the 2025 income statement that reports income tax expense or benefit.
Oriole Corporation recorded warranty accruals as at December 31, 2023, in the amount of $154,000. This reversing difference will cause deductible amounts of $50,300 in 2024, $38,200 in 2025, and $65,500 in 2026. No other reversing difference exists. Oriole's accounting income is $166,000 in each of 2024 and 2025 and the tax rate is 25% for all years. The warranty expenditures occurred as expected. There are no deferred tax accounts at the beginning of 2023. (a) Calculate the deferred tax balances at December 31, 2024 and 2025. Deferred tax eTextbook and Media List of Accounts. 2024 2025

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