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Wildhorse Inc.'s only temporary difference at the beginning and end of 2024 is caused by a $3.33 million deferred gain for tax purposes for an installment sale of a plant asset, and the related receivable (only one-half of which is classified as a current asset) is due in equal installments in 2025 and 2026. The related deferred tax liability at the beginning of the year is $999,000. In the third quarter of 2024, a new tax rate of 20% is enacted into law and is scheduled to become effective for 2026. Taxable income for 2024 is $5,550,000, and taxable income is expected in all future years. (a) (b) Your answer is correct. Determine the amount reported as a deferred tax liability at the end of 2024. Deferred tax liability eTextbook and Media Solution List of Accounts Your answer is correct. 832500 Assistance Used Attempts: unlimited Prepare the journal entry necessary to adjust the deferred tax liability when the new tax rate is enacted into law. (List debit entry before credit entry. 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 O for the amounts.) Account Titles and Explanation Deferred Tax Liability Debit 166500 Credit Income Tax Expense eTextbook and Media Solution List of Accounts 166500 Assistance Used Attempts: unlimited Draft the income tax expense portion of the income statement for 2024. Begin with the line "Income before income taxes." Assume no permanent differences exist. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Current WILDHORSE INC.'s Income Statement (Partial) For the Year Ended December 31, 2024 +A +A 1665000 i +A $

Wildhorse Inc.'s only temporary difference at the beginning and end of 2024 is caused by a $3.33 million deferred gain for tax purposes for an installment sale of a plant asset, and the related receivable (only one-half of which is classified as a current asset) is due in equal installments in 2025 and 2026. The related deferred tax liability at the beginning of the year is $999,000. In the third quarter of 2024, a new tax rate of 20% is enacted into law and is scheduled to become effective for 2026. Taxable income for 2024 is $5,550,000, and taxable income is expected in all future years. (a) (b) Your answer is correct. Determine the amount reported as a deferred tax liability at the end of 2024. Deferred tax liability eTextbook and Media Solution List of Accounts Your answer is correct. 832500 Assistance Used Attempts: unlimited Prepare the journal entry necessary to adjust the deferred tax liability when the new tax rate is enacted into law. (List debit entry before credit entry. 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 O for the amounts.) Account Titles and Explanation Deferred Tax Liability Debit 166500 Credit Income Tax Expense eTextbook and Media Solution List of Accounts 166500 Assistance Used Attempts: unlimited Draft the income tax expense portion of the income statement for 2024. Begin with the line "Income before income taxes." Assume no permanent differences exist. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Current WILDHORSE INC.'s Income Statement (Partial) For the Year Ended December 31, 2024 +A +A 1665000 i +A $

FINANCIAL ACCOUNTING
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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Wildhorse Inc.'s only temporary difference at the beginning and end of 2024 is caused by a $3.33 million deferred gain for tax purposes for an installment sale of a plant asset, and the related receivable (only one-half of which is classified as a current asset) is due in equal installments in 2025 and 2026. The related deferred tax liability at the beginning of the year is $999,000. In the third quarter of 2024, a new tax rate of 20% is enacted into law and is scheduled to become effective for 2026. Taxable income for 2024 is $5,550,000, and taxable income is expected in all future years. (a) (b) Your answer is correct. Determine the amount reported as a deferred tax liability at the end of 2024. Deferred tax liability eTextbook and Media Solution List of Accounts Your answer is correct. 832500 Assistance Used Attempts: unlimited Prepare the journal entry necessary to adjust the deferred tax liability when the new tax rate is enacted into law. (List debit entry before credit entry. 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 O for the amounts.) Account Titles and Explanation Deferred Tax Liability Debit 166500 Credit Income Tax Expense eTextbook and Media Solution List of Accounts 166500 Assistance Used Attempts: unlimited
Transcribed Image Text:Wildhorse Inc.'s only temporary difference at the beginning and end of 2024 is caused by a $3.33 million deferred gain for tax purposes for an installment sale of a plant asset, and the related receivable (only one-half of which is classified as a current asset) is due in equal installments in 2025 and 2026. The related deferred tax liability at the beginning of the year is $999,000. In the third quarter of 2024, a new tax rate of 20% is enacted into law and is scheduled to become effective for 2026. Taxable income for 2024 is $5,550,000, and taxable income is expected in all future years. (a) (b) Your answer is correct. Determine the amount reported as a deferred tax liability at the end of 2024. Deferred tax liability eTextbook and Media Solution List of Accounts Your answer is correct. 832500 Assistance Used Attempts: unlimited Prepare the journal entry necessary to adjust the deferred tax liability when the new tax rate is enacted into law. (List debit entry before credit entry. 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 O for the amounts.) Account Titles and Explanation Deferred Tax Liability Debit 166500 Credit Income Tax Expense eTextbook and Media Solution List of Accounts 166500 Assistance Used Attempts: unlimited
Draft the income tax expense portion of the income statement for 2024. Begin with the line "Income before income taxes." Assume no permanent differences exist. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Current WILDHORSE INC.'s Income Statement (Partial) For the Year Ended December 31, 2024 +A +A 1665000 i +A $
Transcribed Image Text:Draft the income tax expense portion of the income statement for 2024. Begin with the line "Income before income taxes." Assume no permanent differences exist. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Current WILDHORSE INC.'s Income Statement (Partial) For the Year Ended December 31, 2024 +A +A 1665000 i +A $
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