Comprehensive Tax Problem - Part 2In 2024, the Pretax financial income was $825,000, which includes $30,000 of municipal bondincome. On June 1, 2024, an unexpected tax rate change occurred, causing the 2024 (and beyond)tax rates to increase to 28%.1. In addition to the above temporary differences listed in 2023, on Sept 31, 2024, Price Corppurchased equipment for $325,000 (salvage value of $25,000, and a 4-year useful life). The tablebelow lists depreciation for TAX purposes.Year20242025202620272028Depreciation Schedule (TAXES)75,000120,00050,00035,00020,0002. Price has updated its valuation allowance, and determined that it is more likely than not, that 5%of any DTA will not be realized.Prepare the journal entry for 2024 to record Income Tax Expense.

Municipal Bond Income: Municipal bond income of $30,000 was included in pretax financial income on…

Answered: edule (TAXES) 75,000 120,000 50,000…

Business

Accounting

edule (TAXES) 75,000 120,000 50,000 35,000 20,000

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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Question

Comprehensive Tax Problem - Part 2
In 2024, the Pretax financial income was $825,000, which includes $30,000 of municipal bond
income. On June 1, 2024, an unexpected tax rate change occurred, causing the 2024 (and beyond)
tax rates to increase to 28%.
1. In addition to the above temporary differences listed in 2023, on Sept 31, 2024, Price Corp
purchased equipment for $325,000 (salvage value of $25,000, and a 4-year useful life). The table
below lists depreciation for TAX purposes.
Year
2024
2025
2026
2027
2028
Depreciation Schedule (TAXES)
75,000
120,000
50,000
35,000
20,000
2. Price has updated its valuation allowance, and determined that it is more likely than not, that 5%
of any DTA will not be realized.
Prepare the journal entry for 2024 to record Income Tax Expense.

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