Current Attempt in Progress Carla Vista Inc. has two temporary differences at the end of 2024. The first difference stems from installment sales, and the second one results from the accrual of a loss contingency. Carla Vista's accounting department has developed a schedule of future taxable and deductible amounts related to these temporary differences as follows. 2025 2026 2027 2028 Taxable amounts $43,300 $50,800 $56,700 $86,600 Deductible amounts (14,300) (18,500) $43,300 $36,500 $38,200 $86,600 As of the beginning of 2024, the enacted tax rate is 34% for 2024 and 2025, and 20% for 2026-2029. At the beginning of 2024, the company had no deferred income taxes on its balance sheet. Taxable income for 2024 is $473,000. Taxable income is expected in all future years. (a) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2024. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit

Current Attempt in Progress Carla Vista Inc. has two temporary differences at the end of 2024. The first difference stems from installment sales, and the second one results from the accrual of a loss contingency. Carla Vista's accounting department has developed a schedule of future taxable and deductible amounts related to these temporary differences as follows. 2025 2026 2027 2028 Taxable amounts $43,300 $50,800 $56,700 $86,600 Deductible amounts (14,300) (18,500) $43,300 $36,500 $38,200 $86,600 As of the beginning of 2024, the enacted tax rate is 34% for 2024 and 2025, and 20% for 2026-2029. At the beginning of 2024, the company had no deferred income taxes on its balance sheet. Taxable income for 2024 is $473,000. Taxable income is expected in all future years. (a) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2024. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 12E: Temporary and Permanent Differences Lin has just completed its first year of operations and has a...

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Multiple Temporary Differences Vickers Company reports taxable income of 4,500 for 2019. Vickers has two temporary differences between pretax financial income and taxable income at the end of 2019. The first difference is expected to result in taxable amounts totaling 2,470 in future years. The second difference is expected to result in deductible amounts totaling 1,360 in future years. Vickers has a deferred tax asset of 372 and a deferred tax liability of 690 at the beginning of 2019. The current tax rate is 30%, and no change in the tax rate has been enacted for future years. Vickers has positive, verifiable evidence of future taxable income. Required: Prepare Vickerss income tax journal entry at the end of 2019.
Multiple Temporary Differences Wilcox Company has prepared the following reconciliation of its pretax financial income with its taxable income for 2019: At the beginning of 2019, Wilcox had a deferred tax liability of 495. The current tax rate is 30%, and no change in the tax rate has been enacted for future years. At the end of 2019, Wilcox anticipates that actual warranty costs will exceed estimated warranty expense by 100 next year and that financial depreciation will exceed tax depreciation by 1,800 in future years. Wilcox has earned income in all past years and expects to earn income in the future. Required: 1. Prepare Wilcoxs income tax journal entry at the end of 2019. 2. Prepare the lower portion of Wilcoxs 2019 income statement. 3. Show how the income tax items are reported on Wilcoxs December 31, 2019, balance sheet.
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Nadal Inc. has two temporary differences at the end of 2019. The first difference stems from installment sales, and the second one results from the accrual of a loss contingency. Nadal's accounting department has developed a schedule of future taxable and deductible amounts related to these temporary differences as follows. 00202000 00202100 00202200 00202300 Taxable amounts $40,000) $50,000) $60,000) $80,000) Deductible amounts 0000000) 0(15,000) 0(19,000) 0000000) $40,000) $35,000) $41,000) $80,000) As of the beginning of 2019, the enacted tax rate is 34% for 2019 and 2020, and 20% for 2021–2024. At the beginning of 2019, the company had no deferred income taxes on its balance sheet. Taxable income for 2019 is $500,000. Taxable income is expected in all future years. Instructions a. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2019. b. Indicate how deferred income…
(Two Temporary Differences, Multiple Rates, Future Taxable Income) Nadal Inc. has two temporary differences at the end of 2016. The first difference stems from installment sales, and the second one results from the accrual of aloss contingency. Nadal’s accounting department has developed a schedule of future taxable and deductible amounts related to these temporary differences as follows. 2017 2018 2019 2020 Taxable amounts $40,000 $50,000 $60,000 $80,000 Deductible amounts (15,000) (19,000) $40,000 $35,000 $41,000 $80,000 As of the beginning of 2016, the enacted tax rate is 34% for 2016 and 2017, and 38% for 2018–2021. At the beginning of 2016, the company had no deferred income taxes on its balance sheet. Taxable income for 2016 is $500,000. Taxable income is expected in all future years.Instructions(a) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2016.(b) Indicate how deferred income taxes would be…
Current Attempt in Progress Blossom Co. at the end of 2020, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income Estimated litigation expense Installment sales Taxable income $140000 noncurrent. $1500000 3500000 O $140000 current. O $700000 noncurrent. O $0. (2800000) The estimated litigation expense of $3500000 will be deductible in 2022 when it is expected to be paid. The gross profit from the installment sales will be realized in the amount of $1400000 in each of the next two years. The estimated liability for litigation is classified as noncurrent and the installment accounts receivable are classified as $1400000 current and $1400000 noncurrent. The income tax rate is 20% for all years. The deferred tax asset to be recognized is $2200000
E18-10 Multiple Temporary Differences Vickers Company reports taxable income of $4,500 for 2019. Vickers has two temporary differences between pretax financial income and taxable income at the end of 2019. The first difference is expected to result in taxable amounts totaling $2,470 in future years. The second difference is expected to result in deductible amounts totaling $1,360 in future years. Vickers has a deferred tax asset of $372 and a deferred tax liability of $690 at the beginning of 2019. The current tax rate is 30%, and no change in the tax rate has been enacted for future years. Vickers has positive, verifiable evidence of future taxable income. Required: Prepare Vickers’s income tax journal entry at the end of 2019.
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Sarsuela Co. at the end of 2022, its first year of operation, prepared reconciliation between pretax financial income and taxable income as follows: Pretax financial income P400,000 Estimated litigation expense 1,000,000 Installment sales (800,000) Taxable income P600,000 The estimated litigation expenses of P1,000,000 will be deductible in 2023 when it is expected to be paid. The gross profit from installment sales will be realized in the amount of P500,000 and P300,000 each of the next two years. The income tax rate is 30% in current year and 32% in 2023 and 33% in 2024 were enacted for future years. TRUE OR FALSE Statement 1: The net income after tax for the period ending December 31, 2022 is P660,000. Statement 2: Total income tax expense for the period ending December 31, 2022 is P120,000
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Crane Co. at the end of 2020, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income Estimated litigation expense Installment sales Taxable income $1170000 $1180000. $352000. $234000. $590000. 2950000 (2360000) $1760000 The estimated litigation expense of $2950000 will be deductible in 2022 when it is expected to be paid. The gross profit from the installment sales will be realized in the amount of $1180000 in each of the next two years. The estimated liability for litigation is classified as noncurrent and the installment accounts receivable are classified as $1180000 current and $1180000 noncurrent. The income tax rate is 20% for all years. The income tax expense is
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