For 2020, Forrway Corporation, an Accrual Basis calendar year corporation, had Net Income Per Books of $111.550 and the following transactions Premiums on Life Insurance Policy on its key employees-$6.000, Excess Capital Losses-$12.000, Excess Tax Depreciation-$9,000: Life Insurance Proceeds on ife of its key employees-$65.000: Rent Income received in 2020- $30,000 (S20,000 is prepaid and relates to 2020): Tax-Exempt Interest Income - $8.000, Federal Income Tax lability for 2020 -$15.450, Prepaid Rent received and properly taxed in 2019 (but not eamed for Financial Accounting purposes until 2020)-$5,000, Interest Expense on Tax-Exempt Interest Income item-$2.000. The total amount" added" to Net Income Per Books for Forway Corporation in its Schedule M-1 Reconcilation for the tax year of 2020 is OS 80,000 O$ 55.450 OS 87.000 O$167.000

For 2020, Forrway Corporation, an Accrual Basis calendar year corporation, had Net Income Per Books of $111.550 and the following transactions Premiums on Life Insurance Policy on its key employees-$6.000, Excess Capital Losses-$12.000, Excess Tax Depreciation-$9,000: Life Insurance Proceeds on ife of its key employees-$65.000: Rent Income received in 2020- $30,000 (S20,000 is prepaid and relates to 2020): Tax-Exempt Interest Income - $8.000, Federal Income Tax lability for 2020 -$15.450, Prepaid Rent received and properly taxed in 2019 (but not eamed for Financial Accounting purposes until 2020)-$5,000, Interest Expense on Tax-Exempt Interest Income item-$2.000. The total amount" added" to Net Income Per Books for Forway Corporation in its Schedule M-1 Reconcilation for the tax year of 2020 is OS 80,000 O$ 55.450 OS 87.000 O$167.000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Oriole Co. at the end of 2021, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income $ 690,000 Estimated warranty expenses deductible for taxes when paid 1,140,000 (1,632,000) $ 198,000 Extra depreciation Taxable income Estimated warranty expense of $830,000 will be deductible in 2022, $240,000 in 2023, and $70,000 in 2024. The use of the depreciable assets will result in taxable amounts of $544,000 in each of the next three years. Prepare a table of future taxable and deductible amounts. 2022 Future taxable(deductible) amounts Warranties Excess Depreciation Date 2023 Account Titles 2024 Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2021. Assuming an income tax rate of 30% for all years. TOTAL Debit Credit
During 2020, Gorilla Corporation, a calendar year C corporation, has net short-term capital gains of $15,000, net long-term capital losses of $105,000, and taxable income from other sources of $460,000. Prior years' transactions included the following: 2016 net short-term capital gains $40,000 2017 net long-term capital gains 18,000 2018 net short-term capital gains 25,000 2019 net long-term capital gains 20,000 If an amount is zero, enter "0". a. Answer the following to determine how are the capital gains and losses treated on Gorilla's 2020 tax return. How much is Gorilla's net capital loss for 2020?$ What is the amount of the capital loss deduction on Gorilla's 2020 tax return?$ Any excess net capital loss is carried back or forward as a short-term capital loss . b. Determine the amount of the 2020 capital loss that is carried back to each of the previous years. Carried back to 2017 $ Carried back to 2018 $ Carried back to 2019 $…
Four Square Services Corporation estimates that its 2021 taxable income will be $1,000,000. Thus, it incurs a $210,000 liability. For the following independent cases, compute Four Square's minimum quarterly estimated tax payments that will avoid an underpayment penalty. a. For 2020, taxable income was $800,000, and tax liability was $168,000. b. For 2019, taxable income was $2 million, and tax liability was $680,000. For 2020, taxable income was $100,000, and tax liability was $21,000.
At the beginning of 2021, a company had future deductible amounts of $400,000 and the enacted tax rate was 27%. In October 2021, a new income tax act is signed into law that lowers the tax rate to 20% for 2022 and future years. To record the change, the company will (enter 1, 2, 3, or 4 that represents the correct answer): Credit Income Tax Expense by $28,000. Debit Income Tax Expense by $28,000. Credit Deferred Tax Liability by $28,000. Debit Deferred Tax Asset by $28,000.
Slime Corp. maintains its accounting records on the cash basis but restates it financial statements to accrual basis. Iniwan had P600,000 in cash basis pre-tax income for 2020. The following information pertains to Iniwan’s operations for the year ended December 31, 2019 and 2020: Accounts receivable: 2020- P400,000; 2019- P200,000 Accounts payable: 2020- P150,000; 2019- P300,000 Under accrual method, what is the income before taxes should Slime report in its December 31, 2020?
AA Company began operations at the beginning of 2020. The following information pertains to this company: Pretax financial income for 2020 is P100,000 The tax rate enacted for 2020 and future years is 40% Differences between 2020 income statement and the tax return are listed below: Warranty expense accrued for financial reporting purposes amounts to P7,000. Warranty deductions per tax return amounted to P2,000 Income on construction contracts using the percentage of completion method per books amounts to P92,000. Income on construction contracts for tax purposes amounts to P67,000. Depreciation of PPE for financial reporting purposes amounts to P60,000. Depreciation of these assets amounts to P80,000 for the tax return. A P3,500 fine paid for violation of pollution laws was deducted in computing pretax financial income. Interest revenue earned on an investment in tax-exempt bonds amounts to P1,500. Taxable income is expected for the next few years. Compute the deferred tax…
The profit before tax, as reported in the Statement of Profit or Loss and Other Comprehensive Income of Oliver Ltd for the year ended 30 June 2021, amounted to $40,000 including the following revenue and expense items. June 2021 $ Interest revenue 4,500 Bad debts expense 6,000 Depreciation expense - plant 7,000 Annual Leave Expense 2,500 Rent Expense 2,000 Fines and Penalties (non-deductible) 500 Government grant (exempt from tax) 9,000 Additional information: а. The deduction for depreciation for tax purposes was $8,000. b. Bad debts written off for the year were $5,500. С. Interest revenue is receivable in advance and is taxed when received. Total cash receipts for interests were $8,500 during the year. d. The annual leave provision was $3,000 the end of the year (the opening balance was $2,000). е. Rent payments of $3,000 were made during the year. f. The tax rate is 30%. Required Prepare the current tax worksheet and the journal entry to recognise current tax at 30 June 2021.
For 2022, MSU Corporation has $500,000 of adjusted taxable income, $22,000 of business interest income, and $120,000 of business interest expense. It has average annual gross receipts of more than $27,000,000 over the prior three taxable years. a. What is MSU's interest expense deduction for 2022? b. How much interest expense can be deducted for 2022 if MSU's adjusted taxable income is $300,000?
In 2020, Ace Corporation reports gross income of $200,000 (including $150,000 of profit from its operations and $50,000 in dividends from less-than-20%-owned domestic corporations) and $230,000 of operating expenses. A. What is Ace’s NOL for 2020 B. Assume that Ace expects 2021’s taxable income to be $20,000 and 2022’s taxable income to be $100,000, both before any NOL deduction in the carryover year. What NOL deductions can Ace expect to claim in 2021 and 2022 C. How would your answer to Part b change if, in addition to the 2020 NOL, Ace also had a $5,000 NOL carryover from a loss occurring before 2018?
Iniwan Corp. maintains its accounting records on the cash basis but restates it financial statements to accrual basis. Iniwan had P600,000 in cash basis pre-tax income for 2020. The following information pertains to Iniwan's operations for the year ended December 31, 2019 and 2020: Accounts receivable: 2020- P400,000; 2019- P200,000 Accounts payable: 2020- P150,000; 2019- P300,000 Under accrual method, what is the income before taxes should Iniwan report in its December 31, 2020? *
The Wes Trust reports $93,600 of AMT income before the annual exemption. Round any computations and final answer to the nearest dollar. The entity's AMT for 2021 is.................
Robin Corp. had the following in 2020: Taxable Income: $330,000 Federal income tax: $69,300 Interest on state gov’t (muni) bond: $5,000 Interest on corporate bond: $10,000 Meals expense (total): $3,000 Key person life insurance premiums: $3,500 Key person life insurance proceeds: $130,000 Ordinary & necessary business expenses $250,000 Dividends (from a less-than-20%-owned US corp.): $35,000 What is Robin Corp.’s current E&P? Assume that there is no cash surrender value on the life insurance policy?