For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows:Pretax accounting income$ 300,000Permanent difference(15,000 )285,000Temporary difference-depreciation(20,000 )Taxable$265,000Tringali's tax rate is 25%. Assume that no estimated taxes have been paid.What should Tringali report as its deferred income tax liability as of the end of its first year of operations?1. A) $35,000.2. B) $20,000.3. C) $8,7504. D) $5,000.O AO BO D

Deferred tax liability means liability calculated by finding difference between the comapany taxable…

For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Pretax accounting income $ 300,000 Permanent difference (15,000 ) 285,000 Temporary difference-depreciation (20,000 ) Taxable income $ 265,000 Tringali's tax rate is 25%. Assume that no estimated taxes have been paid. What should Tringali report as its deferred income tax liability as of the end of its first year of operations? 1. A) $35,000. 2. B) $20,000. 3. C) $8,750 4. D) $5,000. O A O B O D

For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Pretax accounting income $ 300,000 Permanent difference (15,000 ) 285,000 Temporary difference-depreciation (20,000 ) Taxable income $ 265,000 Tringali's tax rate is 25%. Assume that no estimated taxes have been paid. What should Tringali report as its deferred income tax liability as of the end of its first year of operations? 1. A) $35,000. 2. B) $20,000. 3. C) $8,750 4. D) $5,000. O A O B O D

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

Piper, Inc. reported a net deferred tax asset balance of $166,650 resulting from an estimated warranty expense accrual for book purposes. The total book-tax difference related to the bases of the estimated warranty liability is $505,000. The enacted statutory tax rate related to this balance changed from 33% to 28%, effective immediately. What journal entry will Piper need to make to adjust for this change in tax rates? Group of answer choices Deferred Tax Asset 25,250 Income Tax Payable 25,250 Income Tax Expense 25,250 Deferred Tax Asset 25,250 Income Tax Expense 46,662 Deferred Tax Asset 46,662 Deferred Tax Asset 46,662 Income Tax Payable 46,662
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?
Randolph Company reported pre-tax net income from continuing operations of $800,000 and taxable income of $500,000. The book-tax difference of $300,000 was due to a $200,000 favorable temporary difference relating to depreciation, an unfavorable temporary difference of $80,000 due to an increase in the reserve for bad debts, and $180,000 favorable difference from the receipt of life insurance proceeds. Randolph Company's applicable tax rate is 21%. permanent a. Compute Randolph Company's current income tax expense. b. Compute Randolph Company's deferred income tax expense or benefit. Also prepare the journal entries for a. and b. above.
Fitzgerald Corp. reports pretax accounting income of $210,000, but because of a single temporary difference, taxable income is only $155,000. At the beginning of the year, no temporary differences existed. Fitzgerald is subject to a tax rate of 40%. Prepare the appropriate journal entry to record the company’s income tax expense for the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Knowledge Check 02For its first year of operations, Marcus Corporation reported pretax accounting income of $274,800. However, because of a temporary difference in the amount of $19,200 relating to depreciation, taxable income is only $255,600. The tax rate is 39%. What amount should Marcus report as its deferred income tax liability in its balance sheet at the end of that year?
dev
Tetra Corp, an IFRS reporter, has the deferred tax assets and liabilities presented below: Item Classification on the Balance Sheet of Related Account Deferred Tax Associated with Item Excess of warranty expense over warranty deductions Current $69,000 Asset Accelerated depreciation for tax purposes Noncurrent $79,000 Liability Installment sales receivable Current $39,000 Liability Contingent liability Current $29,000 Asset What will the company report for deferred taxes on the balance sheet? Group of answer choices noncurrent assets: deferred tax asset $20,000 noncurrent liabilities: deferred tax liability $20,000 current assets: deferred tax asset $59,000; noncurrent liabilities: deferred tax liability $79,000 Companies do not report deferred taxes on the balance sheet under IFRS.
Shear Co.'s Year 1 financial statements included profit from an installment sale of $2,600 that was recognized but not received and credit loss expenses of $1,400. No receivables were written off during the year. It is anticipated that both items will be recognized for tax purposes in Year 3. The enacted tax rates are 30% in Year 1 and 25% in Year 3. What amount should Shear report as deferred income tax expense in its Year 1 income statement? A. $300 B. $360 C. $420 D. $780
For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Pretax accounting income $ 280,000 Permanent difference (15,600 ) 264,400 Temporary difference-depreciation (20,900 ) Taxable income $ 243,500 Tringali's tax rate is 25%. Assume that no estimated taxes have been paid. What should Tringali report as its deferred income tax liability as of the end of its first year of operations?
The pre-tax income statements for Moonstone Ltd. for two years (summarized) were as follows: 20X8 20X9 Revenues 266,000 S 330,000 Expenses 181,000 237,000 Pre-tax income s 85,000 $ 93,000 For tax purposes, the following income tax differences existed: a. Revenues on the 20X9 statement of profit and loss include $37,000 rent, which is taxable in 20X8 but was unearned at the end of 20X8 for accounting purposes. b. Expenses on the 20X9 statement of profit and loss include political contributions of $12,500, which are not deductible for income tax purposes. c. Expenses on the 20X8 statement of profit and loss include $20,900 of estimated warranty costs, which are not deductible for income tax purposes until 20X9. Required: 1. What was the accounting carrying value and tax basis for unearned revenue and the warranty liability at the end of 20X8 and 2OX9? 2. Compute (a) income tax payable, (b) deferred income tax, and (c) income tax expense for each period. Assume a tax rate of 30%. (Amounts…
For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Pretax accounting income $ 290,000 Permanent difference (15,000 ) 275,000 Temporary difference-depreciation (20,100 ) Taxable income $ 254,900 Tringali's tax rate is 25%. Assume that no estimated taxes have been paid. What should Tringali report as its deferred income tax liability as of the end of its first year of operations? $20,100. $35,100. $5,025. $8,775.
Before considering a tax loss carryforward of $80 million, Aero Corporation reported $200 million of pretax accounting and taxable income in the current year. The income tax rate for all previous years was 40%. On January 1 of the current year a new tax law was enacted, reducing the rate to 35% effective immediately. Aero's income tax payable for the current year would be: Select one: a. $48 million. b. $28 million. c. $36 million. d. $42 million. e. $80 million.
Range Rover Inc. had taxable income of $152,000 for the year. The GAAP basis of accounts receivable (net) $9,600 less than the tax basis of accounts receivable. Assuming a tax rate of 25%, record the income tax journal entry on December 31. Assume zero beginning balances in deferred tax accounts Note: faline in a journal entry ant required for the transaction select N/A as the account names and leave the Dr. and Cr. answers blank (zero) Dr. Account Name Date Dec 31 income Tax Expose Income Tax Payate Deferred Tax Asset Tocesant income