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ed At the end of its first year of operations, Prince Charming Corporation had a current liability of $300,000 for unearned rent. This was the only difference between pretax accounting income and taxable income. Assume an income tax rate of 25%. Required: The tax liability from the tax return is $750,000. Prepare the journal entry to record income taxes for Prince Charming's first year of operations. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet 1 Record the income taxes. Note: Enter debits before credits. Transaction 1 Record entry General Journal Clear entry Debit Credit View general journal

ed At the end of its first year of operations, Prince Charming Corporation had a current liability of $300,000 for unearned rent. This was the only difference between pretax accounting income and taxable income. Assume an income tax rate of 25%. Required: The tax liability from the tax return is $750,000. Prepare the journal entry to record income taxes for Prince Charming's first year of operations. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet 1 Record the income taxes. Note: Enter debits before credits. Transaction 1 Record entry General Journal Clear entry Debit Credit View general journal

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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Intermediate Accoungting ll ch 16

8 At the end of its first year of operations, Prince Charming Corporation had a current liability of $300,000 for unearned rent. This was the only difference between pretax accounting income and taxable income. Assume an income tax rate of 25%. Skipped Required: The tax liability from the tax return is $750,000. Prepare the journal entry to record income taxes for Prince Charming's first year of operations. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet 1 Record the income taxes. Note: Enter debits before credits. Transaction 1 Record entry General Journal Clear entry Debit Credit View general journal
Transcribed Image Text:8 At the end of its first year of operations, Prince Charming Corporation had a current liability of $300,000 for unearned rent. This was the only difference between pretax accounting income and taxable income. Assume an income tax rate of 25%. Skipped Required: The tax liability from the tax return is $750,000. Prepare the journal entry to record income taxes for Prince Charming's first year of operations. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet 1 Record the income taxes. Note: Enter debits before credits. Transaction 1 Record entry General Journal Clear entry Debit Credit View general journal
6 Isaac Incorporated began operations in January 2024. For some property sales, Isaac recognizes income in the period of sale for financial reporting purposes. However, for income tax purposes, Isaac recognizes income when it collects cash from the buyer's installment payments. In 2024, Isaac had $628 million in sales of this type. Scheduled collections for these sales are as follows: 2024 $ 73 million 2025 125 million 2026 2027 2028 Skipped 125 million 151 million 154 million $ 628 million Assume that Isaac has a 30% income tax rate and that there were no other differences in income for financial statement and tax purposes. Suppose that, in 2025, legislation revised the income tax rates so that Isaac would be taxed in 2026 and beyond at 25%, rather than 30%. Assume that there were no other differences in income for financial statement and tax purposes. Ignoring operating expenses and additional sales in 2025, what deferred tax liability would Isaac report in its year-end 2025 balance sheet? Note: Round your answer to the nearest whole million. Multiple Choice O $232 million $136 million $108 million $108 million
Transcribed Image Text:6 Isaac Incorporated began operations in January 2024. For some property sales, Isaac recognizes income in the period of sale for financial reporting purposes. However, for income tax purposes, Isaac recognizes income when it collects cash from the buyer's installment payments. In 2024, Isaac had $628 million in sales of this type. Scheduled collections for these sales are as follows: 2024 $ 73 million 2025 125 million 2026 2027 2028 Skipped 125 million 151 million 154 million $ 628 million Assume that Isaac has a 30% income tax rate and that there were no other differences in income for financial statement and tax purposes. Suppose that, in 2025, legislation revised the income tax rates so that Isaac would be taxed in 2026 and beyond at 25%, rather than 30%. Assume that there were no other differences in income for financial statement and tax purposes. Ignoring operating expenses and additional sales in 2025, what deferred tax liability would Isaac report in its year-end 2025 balance sheet? Note: Round your answer to the nearest whole million. Multiple Choice O $232 million $136 million $108 million $108 million
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