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

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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.
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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.
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…
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For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Pretax accounting income $220,000 Permanent difference (14,200) 205,800 Temporary difference - depreciation (21,000) Taxable income $ 184,800 Tringali's tax rate is 25 %. Assume that no estimated taxes have been paid. What should Tringali report as its income tax expense for its first year of operations?