Question 21, Warm-Up 1-6 (algorithmic) For 2020, Ross Corporation had pretax ordinary income of $501,000 and sold for $149,000 an asset purchased previously for $129,000. Calculate the tax liability forthe company. The tax liability this year is s (Round to the nearest dollar.)
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- Exercise 19.8 (Two Temporary Differences, One rate, 3 years). Button Company has the following two temporary differences between its income tax expense and income taxes payable. 2020 2021 2022 Pretax Financial Income $840,000 $910,000 $945,000 Excess Depreciation Expense on tax Return (30,000) (40,000) (10,000) Excess Warranty Expense in Financial Income 20,000 10,000 8,000 Taxable Income $830,000 $880,000 $943,000 The income tax rate is 20% for all years. Instructions: a) Assuming there were no temporary differences prior to 2020, prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020,2021, and 2022. b) Indicate how deferred taxes will be reported on the 2022 balance sheet. Button’s product warranty is for 12 months. Deferred tax asset ( $ 0 + $ 0 + $ 0 )..............................$ 0 Deferred tax liability ( $ 0 + $ 0 + $ 0…Bonita Inc. reports the following pretax income (loss) for both book and tax purposes. Pretax Year Income (Loss) Tax Rate 2018 $124,000 20 % 2019 86,000 20 % 2020 (89,000 ) 25 % 2021 126,000 25 % The tax rates listed were all enacted by the beginning of 2018. Prepare the journal entries for years 2018-2021 to record income tax expense (benefit) and income taxes payable, and the tax effects of the loss carryforward, assuming that based on the weight of available evidence, it is more likely than not that one-half of the benefits of the loss carryforward will not be realized. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)12) Ehrlich Corporation prepared the following reconciliation for its first year of operations: Pretax financial income for 2021 $2,550,000 Excess depreciation expense (450,000) Taxable income $2,100,000 The temporary difference will reverse evenly over the next two years at an enacted tax rate of 30%. The enacted tax rate for 2021 is 20%. Prepare the journal entry for the income taxes for 2021
- The Snella Company reports 2023 Pre-tax Net Income of $10,000. The following items exist: Municipal Bond Interest Revenue Fine paid to EPA Unearned Revenues $80 $200 $ 50 The tax rate is 20%. Indicate the amounts for 2023 Income Tax Expense and 12/31/23 Income Tax Payable, respectively. Select one: Oa. $2,064, $2,054 O b. $1,984, $1,954 O c. $1,984, $2,034 O d. $2,024, $2,014 Oe. $2,024, $2,034Q1. Taxable income and applicable tax rates for C.J. Company’s first four years are shown below. For each year, taxable income and pretax financial income are identical. In the table below, taxable income is before any consideration of NOL carryback and carryforward. The enacted tax rates were known at 1/1/2018. Taxable Income Enacted tax rate 2018 $200 20% 2019 ($300) 15% 2020 $340 25% 2021 $210 25% Now assume that C.J. opted to carryback its 2019 NOL and carryforward any unused NOL to future years. Complete the table below for 2018 through 2021 to show the amount of income tax payable to the IRS or the refund due from the IRS for each year. Put your answer in the table below. Show tax payable as a positive number and tax refund as a negative number. Year Tax…Operating income and tax rates for Carla Vista Company's first three years of operations were as follows: 2020 2021 2022 O Income $350000 ($950000) $1630000 Amount $190000 Assuming that Carla Vista Company opts only to carryforward its 2021 NOL, what is the amount of deferred tax asset or liability that Carla Vista Company would report on its December 31, 2021 balance sheet? $285000 $237500 Enacted tax rate $190000 25% 20% 30% Deferred tax asset or liability Deferred tax liability Deferred tax asset Deferred tax liability Deferred tax asset
- Required Information [The following information applies to the questions displayed below] Arndt, Inc. reported the following for 2021 and 2022 ($ In millions): Revenues Expenses Pretax accounting income (income statement) Taxable income (tax return) Tax rate: 25% 2021 $968 792 $ 176 $ 148 2022 $1,012 816 $196 $ 224 a. Expenses each year Include $54 million from a two-year casualty Insurance policy purchased in 2021 for $108 million. The cost is tax deductible in 2021. b. Expenses include $2 million Insurance premiums each year for life Insurance on key executives. c. Arndt sells one-year subscriptions to a weekly Journal. Subscription sales collected and taxable in 2021 and 2022 were $49 million and $51 million, respectively. Subscriptions included in 2021 and 2022 financial reporting revenues were $41 million ($26 million collected in 2020 but not recognized as revenue until 2021) and $49 million, respectively. Hint View this as two temporary differences-one reversing in 2021; one…Mallock Incorporated reports net operating income (loss) for financial reporting and tax purposes in each year as follows ($ in thousands): 2016 $ 160 2017 $ 50 2018 $ 0 2019 2020 $ 0 $ (240) Mallock's federal tax rate decreased from 35% to 21% starting in 2018. Mallock accounts for its 2020 NOL under the CARES Act. Required: 1. Prepare the appropriate journal entry to record Mallock's 2020 income taxes. 2. Show the lower portion of the 2020 income statement that reports income tax expense or benefit. Complete this question by entering your answers in the tabs below.Tamarisk Corporation had the following tax information. Year 2018 2019 2020 Taxable Income $288,000 312,000 384,000 Tax Rate 35 % 30 30 Taxes Paid $100,800 93,600 115,200 In 2021, Tamarisk suffered a net operating loss of $460,800, which it elected to carryback. The 2021 enacted tax rate is 29%. Prepare Tamarisk's entry to record the effect of the loss carryback. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
- Blossom Corporation had the following tax information: Year Taxable Income Tax Rate Taxes Paid 2020 $389,000 31% $120,590 2021 311,000 30% 93,300 2022 398,100 30% 119,430 In 2023, Blossom suffered a net operating loss of $551,000, which it decided to carry back. The 2023 enacted tax rate is 25%. Prepare Blossom's entry to record the effect of the loss carryback. (List debit entry before credit entry. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit Income Tax Receivable 165300 165300Tamarisk Corporation has pretax financial income (or loss) equal to taxable income (or loss) from 2020 through 2026 as follows. Income (Loss) Tax Rate 2020 $(84,000) 25 % 2021 (90,000) 20 % 2022 78,000 20 % 2023 57,000 20 % 2024 (132,000) 20 % 2025 95,000 25 % 2026 162,000 25 % Pretax financial income (loss) and taxable income (loss) were the same for all years since Tamarisk has been in business. Tax rates were not enacted until the year of change. In recording the benefits of a loss carryforward, assume that it is more likely than not that the related benefits will be realized. (a) (b) Indicate what the income tax expense portion of the income statement for 2021 should look like. Assume all income (loss) relates to continuing operations. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses e.g. (45)) Tamarisk Corporation Income Statement (Partial) $The following information pertains to XYZ Inc.: Year Taxable Income (Loss) Tax Rate Taxes Paid 2019 $100,000 25% $25,000 2020 $250,000 30% $75,000 2021 $360,000 22% $79,200 2022 $400,000 26% $104,000 2023 $500,000 24% $120,000 2024 $(600,000) 25% - Assuming that XYZ has a policy of tax refund maximization, how much would the company be able to recover in taxes through the use of its 2024 tax loss? Multiple Choice $141,600 $152,000 $133,000 $145,000 Verena Inc. earned income in 20x4 and suffered a loss for tax purposes in 20x5. Assume that even after carrying back and recovering taxes previously paid, there is still some loss remaining to carry forward. The journal entry related to the recognition of any benefit from carry-forward will be recognized as follows (assume the realization is probable) Multiple Choice Dr. income tax payable; cr. deferred tax asset. Dr. income tax expense; Cr. deferred tax asset. Dr. deferred tax asset;…