Please provide answer this financial accounting question Everly Apparel Inc. uses straight-line depreciation for financialstatement reporting and MACRS for income tax reporting. Threeyears after purchasing one of its buildings, the company has acarrying value of $500,000 and a tax basis of $350,000. There wereno other temporary or permanent differences. Taxable income was$5 million, and Everly's tax rate is 35%. What is the deferred taxliability to be reported in the balance sheet?

Step 1: Define Deferred Tax Liability (DTL)A Deferred Tax Liability (DTL) arises when taxable income…

Answered: Everly Apparel Inc. uses straight-line…

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter14: Taxes On The Financial Statements

Section: Chapter Questions

Problem 24CE

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The Bookbinder Company had 500,000 cumulative operating losses prior to the beginning of last year. It had 100,000 in pre-tax earnings last year before using the past operating losses and has 300,000 in the current year before using any past operating losses. It projects 350,000 pre-tax earnings next year. a. How much taxable income was there last year? How much, if any, cumulative losses remained at the end of the last year? b. What is the taxable income in the current year? How much, if any, cumulative losses remain at the end of the current year? c. What is the projected taxable income for next year? How much, if any, cumulative losses are projected to remain at the end of next year?
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.
Kara Fashions uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. Three years after its purchase, one of Kara’s buildings has a book value of $1,080,000 and a tax basis of $810,000. There were no other temporary differences and no permanent differences. Taxable income was $6 million and Kara’s tax rate is 25%. What is the deferred tax liability to be reported in the balance sheet? Assuming that the deferred tax liability balance was $37,000 the previous year, prepare the appropriate journal entry to record income taxes this year. 1. Deffered tax liability: 2. Journal Entry
Kara Fashions uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. Three years after its purchase, one of Kara’s buildings has a book value of $520,000 and a tax basis of $390,000. There were no other temporary differences and no permanent differences. Taxable income was $4 million and Kara’s tax rate is 25%. 1. What is the deferred tax liability to be reported in the balance sheet? 2. Assuming that the deferred tax liability balance was $23,000 the previous year, prepare the appropriate journal entry to record income taxes this year.
Burnham Company collected rent of $3,800 during Year 1. For income tax reporting, the rent is taxed when collected. For financial reporting, the rent is recognized as income in the period earned. At the end of Year 1, the unearned portion of the rent collected during the year amounted to $440. Burnham had no temporary differences at the beginning of the current year. Assume an income tax rate of 30%. What is the amount of the deferred tax asset that should be recognized at the end of Year 1? deferred tax asset
During its first three years of operations a company reported pre-tax book income of $1,000,000 in year 1, ($1,800,000) in year 2, and $3,000,000 in year 3. The income tax rate applicable to each of the years was 40%. Assume that there weren’t any temporary differences and a valuation allowance was not necessary. What is the amount of the deferred tax asset reported in the year 2 year-end balance sheet if the company elected a loss carryback?
Betta Group just completed its second year of operations and has a deferred tax asset of $100,700 related to a net operating loss of $265,000 from the previous year. In the current year Betta generates $645,000 in revenues and incurs $341,000 in expenses. There are no permanent or temporary book-tax differences. Assuming the same tax rate as last year, what is the tax related journal entry for the current year? OA. Income Tax Refund Receivable 100,700 Deferred Tax Asset 100,700 OB. Deferred Tax Asset Income Tax Benefit 100,700 100,700 OC. Income Tax Expense 245,100 Income Tax Payable 144,400 Deferred Tax Asset 100,700 OD. Income Tax Expense 115,520 Income Tax Payable 14,820 Deferred Tax Asset 100,700
Illusions Inc. just completed its second year of operations and has a deferred tax asset of $43,700 related to a net operating loss of $115,000 from the previous year. In the current year Illusions generates $390,000 in revenues and incurs $260,000 in expenses. There are no permanent or temporary book-tax differences. Assuming the same tax rate as last year, what amount will Illusions record for Income Tax Payable in the current year? Group of answer choices Cannot be determined from the information provided. $49,400 $5700 $148,200
Saginaw Incorporated completed its first year of operations with a pretax loss of $500,000. The tax return showed a net operating loss of $600,000, which the company will carry forward. The $100,000 book–tax difference results from excess tax depreciation over book depreciation. Management has determined that it should record a valuation allowance equal to the net deferred tax asset. Assume the current tax expense is zero. Note: If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Required: Prepare the journal entry to record the deferred tax consequences for recognition of the current year NOL before considering the valuation allowance. Prepare the journal entry to record the deferred tax consequences of the depreciation book-tax difference. Prepare the journal entry to record the deferred tax consequences of the valuation allowance.
Stephens Company has a deductible temporary difference of $2,000,000 at the end of its first year of operations. Its tax rate is 40 percent. Stephens has $1,800,000 of income taxes payable. After a careful review of all available evidence, Stephens determines that it is probable that it will not realize $200,000 of this deferred tax asset. On Stephens Company's statement of financial position at the end of its first year of operations, what is the amount of deferred tax asset? a. $2,000,000. b. $1,800,000. c. $800,000. d. $600,000.
The following information relates to Franklin Freightways for its first year of operations (data in millions of dollars): Pretax, accounting income: Pretax accounting income included: Overweight fines (not deductible for tax purposes) $195 Depreciation expense Depreciation in the tax return 70 110 The applicable tax rate is 25%. There are no other temporary or permanent differences. Franklin Freightways should have recorded ($ in millions): Multiple Choice Tax payable of $40. Tax benefit of $10 due to the NOL. 9 of 39 Next > Prey Question no....pages -pdf Question no....pages MacBook Air

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