IMPORTANT: PLEASE ANSWER CORRECTLY AND I WILL MAKE SURE TO LIKE. THE QUESTION IS IN THE IMAGE ATTACHED. I ONLY NEED PART C.The following information was disclosed during the audit of Whispering Inc.1. Year Amount Dueper Tax Return 2020 $129,100 2021 108,600 2. On January 1, 2020, equipment costing $579,300 is purchased. For financial reporting purposes, the company uses straight-line depreciation over a 5-year life. For tax purposes, the company uses the elective straight-line method over a 5-year life. (Hint: For tax purposes, the half-year convention as discussed in Appendix 11A must be used.)3. In January 2021, $214,500 is collected in advance rental of a building for a 3-year period. The entire $214,500 is reported as taxable income in 2021, but $143,000 of the $214,500 is reported as unearned revenue in 2021 for financial reporting purposes. The remaining amount of unearned revenue is to be recognized equally in 2022 and 2023.4. The tax rate is 20% in 2020 and all subsequent periods. (Hint: To find taxable income in 2020 and 2021, the related income taxes payable amounts will have to be “grossed up.”)5. No temporary differences existed at the end of 2019. Whispering expects to report taxable income in each of the next 5 years. - (c)Draft the income tax section of the income statement for 2020, beginning with "Income before income taxes." (Hint: You must compute taxable income and thencombine that with changes in cumulative temporary differences to arrive at pretax financial income.) (Enter negative amounts using either a negative signpreceding the number e.g. -45 or parentheses e.g. (45).)Whispering Inc.Income Statement (Partial)Click if you would like to Show Work for this question: Open Show Work

Draft the bottom of the income statement for 2011, beginning with “Income before income taxes.”

Answered: Draft the income tax section of the…

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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IMPORTANT: PLEASE ANSWER CORRECTLY AND I WILL MAKE SURE TO LIKE. THE QUESTION IS IN THE IMAGE ATTACHED. I ONLY NEED PART C.

The following information was disclosed during the audit of Whispering Inc.

1.	Year	Amount Due per Tax Return
	2020	$129,100
	2021	108,600

2.		On January 1, 2020, equipment costing $579,300 is purchased. For financial reporting purposes, the company uses straight-line depreciation over a 5-year life. For tax purposes, the company uses the elective straight-line method over a 5-year life. (Hint: For tax purposes, the half-year convention as discussed in Appendix 11A must be used.)
3.		In January 2021, $214,500 is collected in advance rental of a building for a 3-year period. The entire $214,500 is reported as taxable income in 2021, but $143,000 of the $214,500 is reported as unearned revenue in 2021 for financial reporting purposes. The remaining amount of unearned revenue is to be recognized equally in 2022 and 2023.
4.		The tax rate is 20% in 2020 and all subsequent periods. (Hint: To find taxable income in 2020 and 2021, the related income taxes payable amounts will have to be “grossed up.”)
5.		No temporary differences existed at the end of 2019. Whispering expects to report taxable income in each of the next 5 years.

- (c)
Draft the income tax section of the income statement for 2020, beginning with "Income before income taxes." (Hint: You must compute taxable income and then
combine that with changes in cumulative temporary differences to arrive at pretax financial income.) (Enter negative amounts using either a negative sign
preceding the number e.g. -45 or parentheses e.g. (45).)
Whispering Inc.
Income Statement (Partial)
Click if you would like to Show Work for this question: Open Show Work

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