Eight Independent situations are described below. Each involves future deductible amounts and/or future taxable amounts:1.2.3.5.6.7.2The Income StatementRevenue345678($ in millions)Temporary Differences Reported First on:The Tax Return$24191919Expense$24Situations Taxable Income124242424Revenue$24199ExpenseRequired:For each situation, determine taxable income, assuming pretax accounting income is $140 million. (Enter your answers in millions(I.e., 10,000,000 should be entered as 10).)$241414

INTRODUCTION: Revenue is money generated by a firm through its operations. Depending on the accounting technique used, there are many methods for calculating revenue. Accrual accounting will treat credit sales as revenue for products or services given to the client. Revenue is recognized even if payment has not yet been received under certain criteria.SOLUTION: Situations Working ($ in millions) Taxable income ($ in millions) 1. 140+24 164 2. 140-24 116 3. 140+24 164 4. 140-24 116 5. 140+24-19 145 6. 140+24+19 183 7. 140-19+24-14 131 8. 140-19+24+12-14 143 Notes to understand: Addition to pretax accounting income = Expense in income statement & revenue in tax return Deduction to pretax accounting income = Revenue in income statement & expense in tax return

Business

Accounting

Eight Independent situations are described below. Each Involves future deductible amounts and/or future taxable amounts: ($ in millions) Temporary Differences Reported First on: The Tax Return 1. 2. 3. 4. 5. 6. 7. The Income Statement Revenue Expense $24 $24 19 19 19 24 24 24 24 Situations Taxable income Revenue $24 19 Expense $24 14 14 Required: For each situation, determine taxable income, assuming pretax accounting Income is $140 million. (Enter your answers in millions (l.e., 10,000,000 should be entered as 10).)

Eight Independent situations are described below. Each Involves future deductible amounts and/or future taxable amounts: ($ in millions) Temporary Differences Reported First on: The Tax Return 1. 2. 3. 4. 5. 6. 7. The Income Statement Revenue Expense $24 $24 19 19 19 24 24 24 24 Situations Taxable income Revenue $24 19 Expense $24 14 14 Required: For each situation, determine taxable income, assuming pretax accounting Income is $140 million. (Enter your answers in millions (l.e., 10,000,000 should be entered as 10).)

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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Nalad Corp. provided the following data related to accounting and taxable income: 20X8 20X9 Pre-tax accounting income (financial statements) Taxable income (tax return) $510,000 295,000 40% $495,000 710,000 40% Income tax rate There are no existing temporary differences other than those reflected in these data. There are no permanent differences. Required: 1-a. How much tax expense would be reported in each year if the taxes payable method was used? Tax Expense 20X8 20X9 1-b. What is the implied tax rate? (Round your answers to 1 decimal place.) 20X8 20X9 Implied tax rate
1. Deferred tax liability, January 1, 2022, $0. 2. Deferred tax asset, January 1, 2022, $0. 3. Pretax financial income for 2022, $345,000. 4. Cumulative temporary difference at December 31, 2022, giving rise to future taxable amounts, $205,500. 5. Cumulative temporary difference at December 31, 2022, giving rise to future deductible amounts, $64,800. 6. Tax rate for all years, 20%. 7. The company is expected to operate profitably in the future. Determine the income taxes payable for 2022.
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Four Independent situations are described below. Each Involves future deductible amounts and/or future taxable amounts produced by temporary differences: Taxable income Future deductible amounts Future taxable amounts Balance(s) at beginning of the year: Deferred tax asset Deferred tax liability a. Income tax payable currently. b. Deferred tax asset-ending balance. c. Deferred tax asset-change. d. Deferred tax liability-ending balance. 1 $ 88 16 e. Deferred tax liability-change. f. Income tax expense. 2 ($ in thousands) Situation 2 2 $ 220 16 8 The enacted tax rate is 25% Required: For each situation, determine the following: Note: Enter your answers in thousands rounded to one decimal place (l.e. 1,200 should be entered as 1.2). Negative amounts should be indicated by a minus sign. Leave no cell blank, enter "0" wherever applicable. Situation 3 $ 204 20 16 3 10 2 4 $ 272 20 32 4
Eight independent situations are described below. Each involves future deductible amounts and/or future taxable amounts: 1. 2. 3. 4. 5. 6. 7. 8. ($ in millions) Temporary Differences Reported First on: The Income Statement The Tax Return Revenue $22 7 8 17 17 17 Expense $ 22 2222 Situations Taxable Income 1 $ 122 2 3 4 5 6 Revenue $22 17 7 Expense $22 Required: For each situation, determine taxable income, assuming pretax accounting income is $120 million. Note: Enter your answers in millions (i.e., 10,000,000 should be entered as 10). 12 12
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Using the tax rate schedule given here LOADING..., perform the following: a. Find the marginal tax rate for the following levels of sole proprietorship earnings before taxes: $ 15 000; $ 60 000; $ 90 000; $ 150 000; $ 250 000; $ 450 000; and $1 million. b. Plot the marginal tax rates (measured on the y-axis) against the pretax income levels (measured on the x-axis) $0 to $9,875 $0 (10% amount over $0) 9,876 to 40, 125 988 + (12% amount over 9, 876) 40, 126 to 85, 525 4,618 + (22% amount over 40, 126) 85,526 to 163, 300 14, 606 + (24% amount over 85, 526) 163, 301 to 207, 350 33, 272 + (32% amount over 163, 301) 207, 351 to 518, 400 47,368 (35% amount over 207, 351) 518,401 to Unlimited 156, 235 (37% amount over 518, 401)
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Determine taxable income in each of the following independent cases. In all cases, the company was formed in 2012, was very profitable in all years prior to 2017, and had retained earnings of $1,000,000 at the end of 2017. Required: In 2018, Company A has taxable income of $60,500 prior to consideration of any net operating loss. In 2017, the company incurred a net operating loss of $10,200. It did not elect to waive the carryback period. Determine 2018 taxable income. In 2018, Company B has taxable income of $50,400 prior to consideration of any net operating loss. In 2017, the company incurred a net operating loss of $20,300. It elected to waive the carryback period. Determine 2018 taxable income. In 2021, Company C has taxable income of $35,350 prior to consideration of any net operating loss. In 2020, the company incurred a net operating loss of $30, 320 and elected to forgo the carryback period. Determine 2021 taxable income. In 2021, Company D has taxable income of $35,350 prior…