Answered: gross income in 2020 using the…

Business

Accounting

gross income in 2020 using the installment method

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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Oriole Co. at the end of 2021, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income $ 690,000 Estimated warranty expenses deductible for taxes when paid 1,140,000 (1,632,000) $ 198,000 Extra depreciation Taxable income Estimated warranty expense of $830,000 will be deductible in 2022, $240,000 in 2023, and $70,000 in 2024. The use of the depreciable assets will result in taxable amounts of $544,000 in each of the next three years. Prepare a table of future taxable and deductible amounts. 2022 Future taxable(deductible) amounts Warranties Excess Depreciation Date 2023 Account Titles 2024 Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2021. Assuming an income tax rate of 30% for all years. TOTAL Debit Credit
An Omani Establishment sold goods worth OMR 110,000 on Credit in which the debtor made payment of OMR 106,000 on 5th June, 2018. However, the company had written off OMR 4000 as bad debts and claimed deduction as an allowable expenses at the end of tax year 2018. On 3rd June 2019, the defaulting debtor made payment of RO 4,000 which was included in the profit and loss account of the tax year 2019. The tax treatment in regards to bad debts of RO 4,000 for the tax year 2019 will be a. To be ignored for the tax year 2019 b. To be taxed in the tax year 2020 c. Deemed income for the tax year 2019 d. To be added for the tax year 2018
On May 1, 2021, AAA and BBB formed a joint operation to acquire and sell a special type of merchandise. The contractual arrangements provide that AAA is to manage the joint operation for a fee and that gain and losses are to be divided equally. On May 1, 2021, BBB invests cash of P52,000, which P50,000 was used to purchase merchandise. AAA incurs expenses amounting to P2,500. On May 20, one half of the merchandise was sold for P36,000 cash. In the books of BBB, the Investment in Joint Operation account on May 30, 2021 would show a balance of:
As of June 30, 2023, Alpha Ltd disclosed the following details regarding its assets and liabilities from its balance sheet: Assets ($000): Computer equipment at purchase price: 300 Accumulated depreciation: (60) Accounts receivable: 100 Allowance for doubtful accounts: (10) Liabilities: Warranty cost provision: 30 Provision for long service leave benefits: 20 Alpha Ltd depreciates its computer equipment over five years for accounting purposes but over three years for tax purposes, using the straight-line depreciation method. No payments were made for long service leave or warranty claims during the fiscal year. Determine the value of each temporary difference for Alpha Ltd as of June 30, 2023. Calculate the carrying amount and tax base, and specify whether each temporary difference is deductible or taxable.
During 2021, Dud Co. purchases only one asset: equipment (7-year property) for $1,650,000. Dud takes the maximum Sec. 179 deduction and elects out of 100% bonus. In the table below, Compute the maximum tax depreciation for the machinery for 2021-2028, respectively. Answer in whole numbers only, with no decimals, no commas, and no dollar signs. Year 2021 2021 2022 2023 2024 2025 2026 2027 2028 total all years Depreciation Sec. 179 deduction amount (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
On July 3, 2020, Franky purchased on account specialty feeds worth P800,000 net of VAT. A wholesaler operating in the region bought for cash all of the available feeds on July 18, 2020; amount of cash received was P1,120,000 gross of VAT. Franky remitted the value added tax due to the BIR within the month. What is the VAT payable paid by Franky for the month of July? O A. 34,285.71 В. О О с 38,400 О D. 24,000
Iniwan Corp. maintains its accounting records on the cash basis but restates it financial statements to accrual basis. Iniwan had P600,000 in cash basis pre-tax income for 2020. The following information pertains to Iniwan's operations for the year ended December 31, 2019 and 2020: Accounts receivable: 2020- P400,000; 2019- P200,000 Accounts payable: 2020- P150,000; 2019- P300,000 Under accrual method, what is the income before taxes should Iniwan report in its December 31, 2020? *
Why the amount of $35.3million is not used in the calculation of the carrying amount of financial asset? Epsilon prepares financial statements to 31 March each year. The following event has occurred which are relevant to the year ended 31 March 2018: On 1 April 2017, Epsilon loaned $30 million to another entity. Interest of $1·5 million is payable annually in arrears. An additional final payment of $35·3 million is due on 31 March 2020. Epsilon incurred direct costs of $250,000 in arranging this loan. The annual rate of interest implicit in this arrangement is approximately 10%. Epsilon has no intention of assigning this loan to a third party at any time. Required:Explain and show how the three events should be reported in the financial statements of Epsilon for the year ended 31 March 2018. You should assume that Epsilon only measures financial assets at fair value through profit or loss when required to do so by IFRS 9
Greenville Industries uses the accrual basis to account for all sales transactions. Sales for 2022 total $590,000. Included in this amount is $80,000 in receivables from sales on installment. Installment sales are considered revenue for book purposes, but not for tax purposes. Operating expenses total $180,000 and are treated the same for book and tax purposes. What is Greenville's book basis in the installment sale receivable? Group of answer choices $40,000 $80,000 $180,000 $0
Bb.73.
KNB sold real property to Firm P for $15,000 cash and Firm P’s assumption of the$85,000 mortgage on the property.Required: What is KNB’s amount realized on the sale?b. Compute KNB’s after-tax cash flow from the sale if its adjusted basis in the realproperty is $40,000 and its marginal tax rate is 35 percent.
Assume that Maddox Corporation buys new equipment for $15,000 on January 1, 2021. Depreciation for book purposes using the SL method is $3,000 per year. For tax purposes SYD is used with depreciation of $5,000 in 2021 and $4,000 in 2022. Depreciation is the only book - versus - tax difference. Income before depreciation and taxes is $30,000 each year over the next five years and the statutory tax rate is 35% for 2021. The tax rate increased to 40% in 2022. Calculate the increase in the deferred tax liability for 2022. Multiple choice question. $1,200 $250 $700 $500