Current Attempt in Progress For the year ended December 31, 2023, Coronado Ltd. reported income before income taxes of $96,000. In 2023, Coronado Ltd. paid $45,000 for rent; of this amount, $15,000 was expensed in 2023. The remaining $30,000 was treated as a prepaid expense for accounting purposes and would be expensed equally over the 2024-2025 period. The full $45,000 was deductible for tax purposes in 2023. The company paid $72,000 in 2023 for membership in a local golf club (which was not deductible for tax purposes). In 2023 Coronado Ltd. began offering a 1-year warranty on all merchandise sold. Warranty expenses for 2023 were $40,000, of which $29,000 was actual repairs for 2023 and the remaining $11,000 was estimated repairs to be completed in 2024. Meal and entertainment expenses totalled $24,000 in 2023, only half of which were deductible for income tax purposes. Depreciation expense for 2023 was $250,000. Capital Cost Allowance (CCA) claimed for the year was $273,000. Coronado was subject to a 20% income tax rate for 2023. Coronado follows IFRS.

Current Attempt in Progress For the year ended December 31, 2023, Coronado Ltd. reported income before income taxes of $96,000. In 2023, Coronado Ltd. paid $45,000 for rent; of this amount, $15,000 was expensed in 2023. The remaining $30,000 was treated as a prepaid expense for accounting purposes and would be expensed equally over the 2024-2025 period. The full $45,000 was deductible for tax purposes in 2023. The company paid $72,000 in 2023 for membership in a local golf club (which was not deductible for tax purposes). In 2023 Coronado Ltd. began offering a 1-year warranty on all merchandise sold. Warranty expenses for 2023 were $40,000, of which $29,000 was actual repairs for 2023 and the remaining $11,000 was estimated repairs to be completed in 2024. Meal and entertainment expenses totalled $24,000 in 2023, only half of which were deductible for income tax purposes. Depreciation expense for 2023 was $250,000. Capital Cost Allowance (CCA) claimed for the year was $273,000. Coronado was subject to a 20% income tax rate for 2023. Coronado follows IFRS.

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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For calendar 2020, Marvel Corporation, Inc., reported depreciation expense of $900,000 on its income statement, but on its 2020 income tax return, Marvel claimed CCA of $1,200,000. The 2020 balance sheet also included $150,000 in accrued warranty liability that will be deducted for tax purposes when paid. Marvel's income tax rates (known at December 31, 2020) are 30% for 2020 and 2021, and 24% for 2022 and 2023. The depreciation difference and warranty liability will reverse over the next three years as follows: Depreciation Difference Warranty Costs 2021 $ 60,000 $ 70,000 2022 140,000 50,000 2023 100,000 30,000 $ 300,000 $150,000 These were Marvel's only reversible (timing) differences. At December 31, 2020, Marvel’s deferred tax liability should be Select one: a. $67,800. b. $35,400. c. $75,000. d. $133,800. e. None of the above AMOUNTS.
Tokwa't Baboy Company prepared the following reconciliation of income per books with income per tax return for the year ended December 31, 2020. Book income before taxes- P750,000Construction contract revenue which will reverse in 2021- P100,000Depreciation expense that will reverse in equal amounts in each of the next five years- (P400,000)Taxable income- P450,000 What amount should Tokwa't Baboy Company report in its 2020 income statement as total provision for income tax? Assume a 30% tax rate.
Cee & Co.’s fiscal year begins April 1. At the beginning of its fiscal year, Cee & Co. estimates that it will owe $17,400 in property taxes for the year. On June 1, its property taxes are assessed at $17,000, which it pays immediately. Required: 1. Prepare the related journal entries for April 1, May 1, and June 1. 2. Then compute the monthly property tax expense that Cee & Co. would record during July through March.
In 2018, North Company rented a villa for three years and received a total of $60,000. The rent is earned equally over the period 2018-2020. For tax purposes, North should report the full $60,000 on 2018 tax return form. By year end, the company reported an income tax expense of $22,000 and income tax payable of $37,000.In 2019, the company terminated a maintenance contract and agreed to pay $10,000 per year for 2019-2021. The total termination amount is fully deducted for financial reporting purposes and deducted as paid for tax purposes. The pretax financial income for 2019 is $90,000. The tax rates are 30% for 2018 and 35% for 2019. By end of 2019, the government announced the change of tax rate for future periods.a. Prepare the journal entry to record income taxes for 2019.b. Which approach have you applied in answering part (a)? what are the main objectives of this approach?
The end-of-year pretax financial income for UMPI in 2018 was $720,000. It included $40,000 in municipal bond interest income, $15,000 in warranty expenditure, a $25,000 fine for dumping hazardous waste, and $40,000 in depreciation. Tax-deductible depreciation was $65,000. The taxation in their country was 21%. Beginning with "income before income taxes," format the income tax expense part of the net income.
Music Media Ltd. prepares statements quarterly. Port Ai Required: 1. Based on 2019 results, Music's estimated tax liability for 2020 is $303,960. Music will accrue 1/18 of this amount at the end of each month (assume the installments are paid the next day) Prepare the entry on January 31, 2020, to accrue the tax liability and on February 1 to record the payment. View transaction list Journal entry worksheet 1
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During 2020, Rumbo Corporation had cash and credit sales of $21,760 and $15,225, respectively. The company also collected accounts receivable of $9,765 and incurred operating expenses of $27,700, 80% of which were paid during the year. In addition, Rumbo prepaid $4,500 for an 18-month advertising campaign that began September 30. Rumbo’s accrual basis net income (loss) for the fiscal year ending December 31, 2020, was: a $14,075 b $9,285 c $8,535 d ($775)
AA Company began operations at the beginning of 2020. The following information pertains to this company: Pretax financial income for 2020 is P100,000 The tax rate enacted for 2020 and future years is 40% Differences between 2020 income statement and the tax return are listed below: Warranty expense accrued for financial reporting purposes amounts to P7,000. Warranty deductions per tax return amounted to P2,000 Income on construction contracts using the percentage of completion method per books amounts to P92,000. Income on construction contracts for tax purposes amounts to P67,000. Depreciation of PPE for financial reporting purposes amounts to P60,000. Depreciation of these assets amounts to P80,000 for the tax return. A P3,500 fine paid for violation of pollution laws was deducted in computing pretax financial income. Interest revenue earned on an investment in tax-exempt bonds amounts to P1,500. Taxable income is expected for the next few years. Compute the deferred tax…
Current Attempt in Progress In 2023, Crane Ltd., which follows IFRS, reported accounting income of $960,000 and the 2023 tax rate was 20%. Crane had two timing differences for tax purposes: CCA on the company's tax return was $450,000. Depreciation expense on the financial statements was $280,000. These amounts relate to assets that were acquired on January 1, 2023, for $1,800,000. Accrued warranty expense for financial statement purposes was $132,000 (accrued expenses are not deductible for tax purposes). This is the first year Crane offers warranties. Both of these timing differences are expected to fully reverse over the next four years, as follows: Year 2024 2025 2026 2027 (a) Depreciation Difference $55,000 45,000 40,000 30,000 Warranty Expense Rate $18,000 20% 28,000 20% 38,000 18% 48.000 18% $170.000 $132,000 Calculate income taxes payable for 2023. Income taxes payable $
Please show each step of calculation. Thanks in advance.
The following information is available for Splish Corporation for 2020. 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $116,000. This difference will reverse in equal amounts of $29,000 over the years 2021–2024. 2. Interest received on municipal bonds was $10,200. 3. Rent collected in advance on January 1, 2020, totaled $60,000 for a 3-year period. Of this amount, $40,000 was reported as unearned at December 31, 2020, for book purposes. 4. The tax rates are 40% for 2020 and 35% for 2021 and subsequent years. 5. Income taxes of $312,000 are due per the tax return for 2020. 6. No deferred taxes existed at the beginning of 2020. (a) Compute taxable income for 2020. Taxable income for 2020 $enter Taxable income for 2020 in dollars