Se.125. During Year 1, its first year of operations, a company reported a net operating loss of $495,000 for financial reporting and taxpurposes. During Year 2, the company reported income of $275,000 for financial reporting and tax purposes. The enacted tax rateis 25%.Required:1. Prepare the journal entry to recognize the company's Year 2 tax expense or tax benefit.2. Show the lower portion of the Year 2 income statement that reports income tax expense or benefit.Complete this question by entering your answers in the tabs below.Required 1 Required 2Show the lower portion of the Year 2 income statement that reports income tax expense or benefit.$< Required 1 During Year 1, its first year of operations, a company reported a net operating loss of $495,000 for financial reporting and taxpurposes. During Year 2, the company reported income of $275,000 for financial reporting and tax purposes. The enacted tax rateis 25%Required:1. Prepare the journal entry to recognize the company's Year 2 tax expense or tax benefit.2. Show the lower portion of the Year 2 income statement that reports income tax expense or benefit.Complete this question by entering your answers in the tabs below.Required 1 Required 2Prepare the journal entry to recognize the company's Year 2 tax expense or tax benefit.Note: If no entry is required for a transaction/event, select "No journal entry required in the first account field.View transaction listView journal entry worksheet/No1Event1Defened tax assehooma tax expenseGeneral JoumalRequired 2 >DebitCredit

If a company incurs any loss in a periodic year then as per the tax rate it is carried forward next…

Answered: During Year 1, its first year of…

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter14: Taxes On The Financial Statements

Section: Chapter Questions

Problem 4BCRQ

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In the current year, Madison Corporation had 50,000 of taxable income at a tax rate of 25%. During the year, Madison began offering warranties on its products and has a Warranty liability for financial reporting purposes of 5,000 at the end of the year. Warranty expenses are not deductible until paid for income tax purposes. Prepare the journal entry to record Madisons income taxes at the end of the year.
Juroe Company provided the following income statement for last year: Juroes balance sheet as of December 31 last year showed total liabilities of 10,250,000, total equity of 6,150,000, and total assets of 16,400,000. Refer to the information for Juroe Company on the previous page. Also, assume that Juroes total assets at the beginning of last year equaled 17,350,000 and that the tax rate applicable to Juroe is 40%. Required: Note: Round answers to two decimal places. 1. Calculate the average total assets. 2. Calculate the return on assets.
Grevilla Corporation is a manufacturing company. The corporation has accumulated earnings of $950,000, and it can establish reasonable needs for $400,000 of that amount. Calculate the amount of the accumulated earnings tax (if any) that Grevilla Corporation is subject to for this year. $_____________
Barth James Inc. has the following deferred tax assets and liabilities: 12,000 noncurrent deferred tax asset, and 10,500 noncurrent deferred tax liability. Show how Barth James would report these deferred tax assets and liabilities on its balance sheet.
Romie Ltd is preparing accounts for the year ended 31 December 20X5. The company has an estimated tax charge of $35,000 for the year ended December 20X5. The trial balance includes an entry of $2,000 relating to an over provision of tax in the previous financial year. What is the charge for tax in the statement of profit or loss for the year ended December 20X5?
Calculate the balance in the company’s deferred income tax liability account at the end of each year.
On December 31, for GAAP purposes, Clubs Inc. reported a balance of $56,000 in Prepaid Maintenance Expense for services to be received over the following year. For tax purposes, however, prepaid costs are deducted when paid. Taxable income is $184,000 and the tax rate is 25%. Assume no other temporary differences or any beginning balances in deferred tax accounts. Required a. Record the income tax journal entry on December 31. •Note: If a line in a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero). Date Account Name Dec. 31 Income Tax Expense N/A Income Tax Payable Deferred Tax Liability To record income tax expense Dr. Cr. 60,000 0 0 0 0 46,000 ▼ 0 14,000 b. Prepare the income tax section of the income statement for the year and provide the disclosure of current and deferred tax expense. •Note: Do not use negative signs with your answers. Partial Income Statement For the year ended December 31 Income…
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During 20X1, a company reported an increase in the deferred tax liability account of $47,790, a decrease in the deferred tax asset account of $17,225, and an income tax liability as per the 20X1 income tax return of $198,375. What is the income tax expense to be reported on the income statement for the year ending December 31, 20X1? Multiple Choice $228,940 $263,390 $167,810 $198,375
For the year ended December 31, year 1, Tyre Co. reported pretax financial statement income of $7,500,000. Its taxable income was $6,500,000. The difference is due to accelerated depreciation for income tax purposes. Tyre's effective income tax rate is 30%, and Tyre made estimated tax payments during year 1 of $900,000. 1. What amount should be reported as current tax expense for the current year? a. 2,250,000 b. 1,950,000 c. 1,050,000 d. 1,350,000 2. What amount should be reported as total income tax expense? a. 1,350,000 b. 1,950,000 c. 1,050,000 d. 2,250,000 3. What amount of income tax payable should be presented at year end? a. 2,250,000 b. 1,350,000 c. 1,950,000 d. 1,050,000
For the first year of operations, Fidelity Engineering reported pretax accounting income of $120,000. Interest revenue from municipal bonds is $20,000. Depreciation expense reported for tax purposes was in excess of depreciation expenses reported on the income statement of $40,000. Tax rate is 25%. How much is the taxable income? How much is Income Tax Payable? How much is income tax expense? Any DTA or DTL? If so, how much?
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