Grand Corporation reported pretax book income of $660,000. Tax depreciation exceeded book depreciation by $440,000. In addition, the company received $330,000 of tax-exempt municipal bond interest. The company's prior-year tax return showed taxable income of $55,000. Grand's beginning book (tax) basis in its fixed assets was $2,100,000 ($1,880,000) and its ending book (tax) basis is $2,600,000 ($1,960,000). Compute the company's current income tax expense or benefit. Note: Leave no answer blank. Enter N/A or zero.

Grand Corporation reported pretax book income of $660,000. Tax depreciation exceeded book depreciation by $440,000. In addition, the company received $330,000 of tax-exempt municipal bond interest. The company's prior-year tax return showed taxable income of $55,000. Grand's beginning book (tax) basis in its fixed assets was $2,100,000 ($1,880,000) and its ending book (tax) basis is $2,600,000 ($1,960,000). Compute the company's current income tax expense or benefit. Note: Leave no answer blank. Enter N/A or zero.

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

Nirvana Corporation reports pretax financial income of $260,000 for 2022. The following items cause taxable income to be different than pretax financial income. Rental income on the 2022 tax return is $65,000 greater than on the income statement. Depreciation expense on the tax return is greater than depreciation on the income statement by $40,000. Interest on an investment in a municipal bond of $6,500 is reported on the income statement. Nirvana's tax rate is 25% for all years. There are no deferred taxes at the beginning of 2022. The company expects to realize only 40% of the benefit of any deferred tax assets. The fiscal year ends December 31, 2022. Required: 1. Prepare the journal entries to record i) income tax expense, income taxes payable, and deferred income taxes for 2022, and ii) any valuation allowance needed. 2. Indicate clearly what would be reported on the income statement beginning with income before income taxes for the year ended December 31, 2022 from just…
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:
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.
Book taxable income for the year after taxes was $352,103, which includes the dividend income. Book federal income tax expense for the year was $93,597 Tax depreciation deduction exceeded book depreciation by $25,000. The corporation deducted from its book income $5,000 in entertainment-related expenses. The corporation paid a $4,000 government fine that was deducted from its book income. The corporation claimed a book deduction of $12,500 for allowance for doubtful accounts for receivables generated this year. It wrote-off $8,000 in receivables from prior years that were deemed uncollectible. Geo-Jack received a total of $30,000 in taxable dividends and deducted $21,500 for taxes as a dividends received deduction. Assume the amount of dividend income for book is the same as the amount of dividend income for tax. prepare Geo Jack's M-1 based on the following information
am.115.
Munabhai
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: $________________
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?
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:
Insure Corporation reported a net operating loss of $25 million for financial reporting and tax purposes. Taxable income last year and the previous year, respectively, was $20 million and $15 million. The enacted tax rate each year is 25%. Assume that Insure qualifies as a type of company that is allowed to carry back an NOL to two prior taxable years, using the earliest year first. Prepare the journal entry to recognize the income tax benefit of the net operating loss.