estions 16-18 (continues from Questions 14-15):Assume BakerCo reports $3,750,000 of financial income per GAAP in 2007, which includes $300,000of municipal bond interest. As expected, the tax rate in 2007 is 30%. However, a tax law changegoes into effect for 2008 and beyond dropping the tax rate in 2008 and beyond to 25%. (The law ispassed in 2007, so BakerCo goes into the end of 2007 knowing the future tax rate will be 25%)What will BakerCo report as pre-tax (taxable) income to the IRS in 2007?What is the journal entry (or entries) necessary at the end of 2007 related to taxes? (includingGAAP-tax differences)How will BakerCo report the deferred tax asset/liability on the 2007 balance sheet? Please providethe amount as well as the specific section of the balance sheet (i.e current liabilities, intangibleassets, etc.).

The objective of the question is to calculate the pre-tax income that BakerCo will report to the IRS…

Answered: estions 16-18 (continues from Questions…

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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Please help me solve this question. thanks so much!
100 Willobee Co. reported book income of $21,399,000 for 2023. This number included $1,284,000 of income from exempt municipal bonds. For tax purposes, the company reported $4,622,000 less in depreciation than that reported for GAAP purposes. The company also made tax payments of $3,210,000 during the year. If Willobee Co.'s 2023 tax rate was 30%, what will they report as deferred taxes on their 2023 balance sheet? ( 3) $1,386,600 deferred tax liability $1,771,800 deferred tax liability O $1,771,800 deferred tax asset $1,386,600 deferred tax asset
Pretax accounting income is $206,000. Depreciation for tax is $111,000; depreciation for accounting is $29,000. Bad debt expense for tax is $12,000; bad debt expense for accounting is $9000. A fine for pollution of a river was imposed by the state of Kentucky for $7000. The tax rate is 20%. Which of the following is true? Income tax expense is 206,000 x .2 The current portion is 206,000 x .20 Income tax expense is less than the current portion. Income tax expense is more than the current portion.
Improved Shoes Company recorded book income of $100,000 in 2020. It does not have any permanent differences, and the only temporary difference relates to a $75,000 installment sale that it recorded for book purposes. Improved Shoes anticipates collecting the installment sales equally over the following 2 years. The current enacted tax rate is 40%. The substantively enacted tax rates for the following 3 years are 42%, 45%, and 45%, respectively. What deferred tax amount should Improved Shoes record for this temporary difference under U.S. GAAP? The book basis of the installment sales receivable from the installment sales is rate Improved Shoes Company will use to calculate the deferred tax amount is record a deferred tax- in the amount of than the tax basis of the asset. The tax Therefore, Improved Shoes will
The XYZ, Inc. reported $50 million of taxable income. Its federal tax rate was 21% (ignore any possible state corporation taxes). What is the company’s federal income tax bill for the year? Question 1 options: a) $11,500,000 b) $10,500,000 c) $12,100,000 d) $11,100,000
At the end of its first year of operations on December 31, 2022, the Metro Company reported pretax financial income of $100,000. An investigation of that income revealed the following items:· Bad debts expense of $12,000 was recognized (reported on 2022 income statement). The accounts will be written off (tax deductible) in 2023.· Interest received on municipal bonds: $7,500.· Warranty expenses of $16,000 were accrued for financial reporting purposes, but were not expected to result in a cash payment until 2023.· Depreciation on the tax return exceeded depreciation for financial reporting purposes by $32,000.Assume that any deferred tax assets are considered more likely than not to be realized. The enacted income tax rate for all years is 25%.Required:1) Compute taxable income. Show your calculation. If not, no credit.2) Prepare the entry to record income tax expense and any related assets and liabilities for Metro on December 31, 2022.
Ivanhoe pays a weekly payroll of $250000 that includes federal income taxes withheld of $38100, FICA taxes withheld of $23970, and 401(k) withholdings of $26500. What is the effect on assets and liabilities from this transaction? Assets decrease $187930 and liabilities decrease $62070. Assets decrease $187930 and liabilities increase $62070. Assets decrease $161430 and liabilities increase $88570. Assets decrease $250000 and liabilities do not change.
7
On December 31 (fiscal year-end) financial statements of Collette, Inc. reported the following information (in millions) Inventories (net) LIFO reserve Net Income 2022 468,611 3,476 13,918 Assume corporate tax rate of 40%. 2021 437,396 3,271 13,622 Question: If Collette had used FIFO method instead of LIFO method, what net income would Collette report in 2022?
The management accountant at Miller Merchandising & More, Odail Russell is in the process of preparing the cash budget for the business for the fourth quarter of 2021. It is customary for the business to borrow money during this quarter. Extracts from the sales and purchases budgets are as follows: Cash Sales Sales On Account $640,000 $550,000 $600,000 $800,000 $500,000 Month Purchases August September $85,000 $70,000 $88,550 $77,160 $174,870 $420,000 $550,000 $500,000 $600,000 $450,000 October November December i) An analysis of the records shows that trade receivables are settled according to the following credit pattern, in accordance with the credit terms 4/30, n90: 50% in the month of sale 30% in the first month following the sale 20% in the second month following the sale ii) Expected purchases include monthly cash purchases of 5%. All other purchases are on account. Accounts payable are settled as follows, in accordance with the credit terms - 2/30, n60: 60% in the month in…

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