For the year ended December 31, 2021, Irene Company reported pretax accounting income of P6,000,000. The taxable income was P7,000,000. The difference is due to rental received in advance. Rental income is taxable when received. The income tax rate is 30% and the entity made no estimated tax payment in the current year. What amount should be reported as total income tax expense for the current year? O 2,100,000 O 1,800,000 O 1,000,000 O 1,100,000

For the year ended December 31, 2021, Irene Company reported pretax accounting income of P6,000,000. The taxable income was P7,000,000. The difference is due to rental received in advance. Rental income is taxable when received. The income tax rate is 30% and the entity made no estimated tax payment in the current year. What amount should be reported as total income tax expense for the current year? O 2,100,000 O 1,800,000 O 1,000,000 O 1,100,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: reported the following: Earnings (loss) Depreciation (assets have a cost of $360,000) CCA…

A: Accounting Income:Accounting income, also known as book income or financial income, is used for…

Q: Alvis Corporation reports pretax accounting income of $400,000, but due to a single temporary…

A: Calculate the net income of Company Alvis’s:

Q: x financial income s depreciation expense on tax return Es warranty expense in financial income ble…

A: Lets understand the basics.When temporary difference arise between the taxable income and financial…

Q: Novak SpA reports pretax financial income of €74,100 for 2022. The following items cause taxable…

A: Part 2: Prepare the journal entry to record income tax expense, deferred income taxes, and income…

Q: Discord Inc. income tax return shows taxes currently payable for 2020 of $85,000. The company…

A: Deferred tax asset is a non-current asset which shows an advance payment of tax and has a debit…

Q: What amount should be reported as current tax expense for the current year? ₱ 1,050,000 ₱…

A: Here in this question, we are required to determine current tax expense for year ended December 31,…

Q: For the year ended December 31, 2019, Nelson Co.’s income statement showed income of $435,000 before…

A: The income which is taxed as per the rules and principles of tax laws is called taxable income.

Q: The following information relates to Crane Corp.: At July 1, 2022 At June 30, 2023 Temporary…

A: Taxable income = Pretax accounting income + Deductible temporary differences + Taxable Temporary…

Q: CASE IV JKL Company provided the following information to its accountant to determine the tax due…

A: Note : Adjustments while computing taxable income 1)Accounting depreciation will be added back and…

Q: 1)Roberts Corp. reports pretax accounting income of $200,000, but due to a single temporary…

A: The deferred tax liability is created when the income tax liability (income tax expense) as per the…

Q: KAY Co. reported net income for the current year 2021 at 4,180,000 before taxes. Included in the…

A: A deferred tax asset is an asset to the Company that arises if the Company has overpaid taxes or…

Q: JAY Co. reported net income for the current year 2021 at ₱2,395,000 before taxes. Included in the…

A: The income tax is the tax the government imposes on business income and individuals. It is a source…

Q: Bonita Company reports pretax financial income of $76,500 for 2020. The following items cause…

A: Taxable income: It is the income calculated as per the tax laws and on which the applicable tax…

Q: Pretax financial statement income for the year ended December 31, 2024 was $180 million for Wilton…

A: The objective of the question is to calculate the current portion of income tax expense for Wilton…

Q: Nalad Corp. provided the following data related to accounting and taxable income: Pre-tax accounting…

A: Dear student, the following guidelines have been provided to assist you in approaching your…

Q: Dhapa

A: The objective of the question is to calculate the taxable income or loss for the years 20X7 and…

Q: r the year ended December 31, 2019, Nelson Co.’s income statement showed income of $425,000 before…

A: Taxable income is the portion of a person's or a company's income that is used to calculate how much…

Q: n 2025 Vaughn Corporation had pretax financial income of $185,000 and taxable income of $117,000.…

A: Lets understand the basics.Income tax is a tax levied on an individual’s income (taxable income). It…

Q: JAY Co. reported net income for the current year 2021 at ₱2,395,000 before taxes. Included in the…

A: When a company's taxable income is less than its accounting income, a liability known as a deferred…

Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

For the year ended December
31, 2021, Irene Company
reported pretax accounting
income of P6,000,000. The
taxable income was
P7,000,000. The difference is
due to rental received in
advance. Rental income is
taxable when received. The
income tax rate is 30% and the
entity made no estimated tax
payment in the current year.
What amount should be
reported as total income tax
expense for the current year?
O 2,100,000
O 1,800,000
O 1,000,000
O 1,100,000

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Thornton, Inc., had taxable income of $129632 for the year. The company's marginal tax rate was 34 percent and its average tax rate was 24.7 percent. How much did the company have to pay in taxes for the year? a.30432 b.44075 c.30776 d.29074
None
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
How much is the restated balance of AMSTERDAM's retained earnings account at January 1, 2021?
At the beginning of 2021, Pitman Co. had pretax financial income of $1,200,000. Additionally, there was a timing difference of $300,000 due to an accounts receivable that will not be collected until the following year. The tax rate us 30%. A. Calculate the total taxable income for 2021. B. Calculate Income tax expense, income tax payable, and the deferred amount for 2021, and create the journal entry.
Recording Income Tax Expense Rangee Rover Inc. had taxable income of $218,500 for the year. The GAAP basis of accounts receivable (net) is $13,800 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: If a line in a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero). Date Account Name Cr. Dec. 31 Income Tax Expense Deferred Tax Liability Income Tax Payable N/A To record income tax expense. > > Dr. 54,625 0 0 O 0x 13,800 * 40,825 * 0
At the end of the year, a deductible temporary difference of $40 million has been recognised due to the difference between the carrying amount of a liability account for estimated expenses and its tax base. Taxable income is $50 million. No temporary differences existed at the beginning of the year, and the tax rate is 35%. Required: a. Prepare the journal entry(s) to record income taxes during the period. b.How much will income tax expense be shown in the income statement? c.
Help me
Please answer it in good accounting form
Buffalo Company has the following two temporary differences between its income tax expense and income taxes payable. 2020 2021 2022 Pretax financial income $811,000 $932,000 $992,000 Excess depreciation expense on tax return (31,500 ) (39,100 ) (9,900 ) Excess warranty expense in financial income 19,900 9,800 8,300 Taxable income $799,400 $902,700 $990,400 The income tax rate for all years is 20%. (a) Your Answer Correct Answer (Used) 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. (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.) Account Titles and Explanation Debit Credit…
Sheridan Company reported the following results for the year ended December 31, 2020, its first year of operations: Income (per books before income taxes) $3343000 Taxable income 4466000 The disparity between book income and taxable income is attributable to a temporary difference, which will reverse in 2021. What should Sheridan record as a net deferred tax asset or liability for the year ended December 31, 2020, assuming that the enacted tax rates in effect are 35% in 2020 and 30% in 2021? O $393050 deferred tax liability $336900 deferred tax liability $393050 deferred tax asset $336900 deferred tax asset
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.)