Grand Corporation reported pretax book income of $645,000. Tax depreciation exceeded book depreciation by $430,000. In addition, the company received $322,500 of tax-exempt municipal bond interest. The company's prior-year tax return showed taxable income of $53,750. Grand's beginning book (tax) basis in its fixed assets was $2,075,000 ($1,860,000) and its ending book (tax) basis is $2,575,000 ($1,945,000). Compute the company's current income tax expense or benefit. Note: Leave no answer blank. Enter N/A or zero. Answer is complete but not entirely correct. N/A S expense S Current income tax Deferred income tax 0 22,575

Grand Corporation reported pretax book income of $645,000. Tax depreciation exceeded book depreciation by $430,000. In addition, the company received $322,500 of tax-exempt municipal bond interest. The company's prior-year tax return showed taxable income of $53,750. Grand's beginning book (tax) basis in its fixed assets was $2,075,000 ($1,860,000) and its ending book (tax) basis is $2,575,000 ($1,945,000). Compute the company's current income tax expense or benefit. Note: Leave no answer blank. Enter N/A or zero. Answer is complete but not entirely correct. N/A S expense S Current income tax Deferred income tax 0 22,575

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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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.
Grand Corporation reported pretax book income of $624, 000. Tax depreciation exceeded book depreciation by $416,000. In addition, the company received $312,000 of tax-exempt municipal bond interest. The company's prior - year tax return showed taxable income of $52,000. Grand's beginning book (tax) basis in its fixed assets was $2,040, 000 ($1,832, 000) and its ending book (tax) basis is $2, 540,000 ($1,924, 000). Compute the company's current income tax expense or benefit. Note: Leave no answer blank. Enter N/A or zero.
Li Corporation reported pretax book income of $660,000. Tax depreciation exceeded book depreciation by $412, 000. Li's beginning book (tax) basis in its fixed assets was $1,960,000 ($1,748, 000) and its ending book (tax) basis is $1,860,000 ($1, 272, 000). In addition, the company received $360, 000 of tax-exempt municipal bond interest. The company's prior - year tax return showed taxable income of $49,000. Assuming a tax rate of 21 percent, compute the company's deferred income tax expense or benefit.
In its first year of operations, HD Corporation reported pretax accounting income of $820 million for the current year. Depreciation reported in the tax return in excess of depreciation in the income statement was $1,020 million. The excess tax will reverse itself evenly over the next three years. The current year's tax rate of 25% will be changed under the current law to 30% next year and 35% for all subsequent years. At the end of the current year, the deferred tax liability related to the excess depreciation for HD Corp, will be: Multiple Choice $340 million $306 million $408 million $357 million
Abbot Corporation reported pretax book income of $500,000. During the current year, the reserve for bad debts increased by $5,000. In addition, tax depreciation exceeded book depreciation by $40,000. Finally, Abbot received $3,000 of tax-exempt life insurance proceeds from the death of one of its officers. Abbot's current income tax expense or benefit would be:
The Talley Corporation had taxable operating income of $425,000 (i.e., earnings from operating revenues minus all operating costs). Talley also had (1) interest charges of $40,000, (2) dividends received of $10,000, and (3) dividends paid of $25,000. Its federal tax rate was 21% (ignore any possible state corporate taxes). Recall that 50% of dividends received are tax exempt. What is the firm’s taxable income? Round your answer to the nearest dollar. What is the after-tax income? Round your answers to the nearest dollar.
Iowa Corporation began operations in January 2021 and purchased an equipment for $60,000. Iowa uses straight-line depreciation over 4 years, for financial reporting purposes. For tax purposes, the equipment is fully depreciated in the year of purchase. Pretax accounting income for 2021 was $200,000, which includes interest revenue of $30,000 from municipal bonds. The enacted tax rate is 25% for all years. There are no other differences between accounting and taxable income. Required: a. Calculate taxable income in 2021. b. Prepare journal entry in 2021. c. Prepare journal entry assuming taxable income in 2022 is $180,000.
am.115.
In the current year, Vorschusse Corporation (a calendar year C corporation) had operating income of $82,000 and operating expenses of $66,000. In addition, Vorschusse had a long-term capital gain of $5,000 and a short-term capital loss of $6,000. a. Compute Vorschusse's taxable income and tax for the year. Taxable income: $__________Income tax: $_______________ b. Assume the same facts except that Vorschusse's long-term capital gain was $8,000. Compute Vorschusse's taxable income and tax for the year. Taxable income: $____________Income tax: $________________
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In the current year, Axle, Inc., a calendar year C corporation, has $6,000,000 of adjusted taxable income, $300,000 of business interest income, zero floor plan financing interest, and $2,900,000 of business interest expense. Axle has average gross receipts for the prior three-year period of $32,000,000. What is Axle's interest deduction for the year? Answer:
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