What is the adjusted net income of this financial accounting question? Harrison Enterprises is a calendar-year, cash basis taxpayer. The IRS required HarrisonEnterprises to change to the accrual method of accounting for 2023. Net income for2023 under the accrual basis was $75,000 before any adjustments.On December 31, 2022, the balances in:Inventory $7,000• Accounts Receivable = $18,000• Accounts Payable = $8,000What is Harrison Enterprises' adjusted net income for 2023?

Step 1: Definition of Accrual AccountingAccrual accounting is a method where revenues and expenses…

Answered: Harrison Enterprises is a…

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 31CE

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How do the all events and economic performance requirements apply to the following transactions by an accrual basis taxpayer? a. The company guarantees its products for six months. At the end of 2019, customers had made valid claims for 600,000 that were not paid until 2020. Also, the company estimates that another 400,000 in claims from 2019 sales will be filed and paid in 2020. b. The accrual basis taxpayer reported 200,000 in corporate taxable income for 2019. The state income tax rate was 6%. The corporation paid 7,000 in estimated state income taxes in 2019 and paid 2,000 on 2018 state income taxes when it filed its 2018 state income tax return in March 2019. The company filed its 2019 state income tax return in March 2020 and paid the remaining 5,000 of its 2019 state income tax liability. c. An employee was involved in an accident while making a sales call. The company paid the injured victim 15,000 in 2019 and agreed to pay the victim 15,000 a year for the next nine years.
Quince Corporation has taxable income of $485,000 for its calendar tax year. Calculate the corporation's income tax liability for 2019 before tax credits. $________________
Prior to and during 2019, Shadrach Company reported tax depreciation at an amount higher than the amount of financial depreciation, resulting in a book value of the depreciable assets of 24,500 for financial reporting purposes and of 20,000 for tax purposes at the end of 2019. In addition, Shadrach recognized a 3,500 estimated liability for legal expenses in the financial statements during 2019; it expects to pay this liability (and deduct it for tax purposes) in 2023. The current tax rate is 30%, no change in the tax rate has been enacted, and the company expects to be profitable in future years. What is the amount of the net deferred tax liability at the end of 2019? a. 300 b. 450 c. 1,050 d. 1,350
On January 1, 2019, Kunto, a cash basis taxpayer, pays 46,228 for a 24-month certificate. The certificate is priced to yield 4% (the effective interest rate) with interest compounded annually. No interest is paid until maturity, when Kunto receives 50,000. In your computations: a. Compute Kuntos gross income from the certificate for 2019. b. Compute Kuntos gross income from the certificate for 2020. Round any amounts to the nearest dollar.
In the current year, Madison Corporation had 50,000 of taxable income at a tax rate of 25%. During the year, Madison began offering warranties on its products and has a Warranty liability for financial reporting purposes of 5,000 at the end of the year. Warranty expenses are not deductible until paid for income tax purposes. Prepare the journal entry to record Madisons income taxes at the end of the year.
Bigham Corporation, an accrual basis calendar year taxpayer, sells its services under 12-month and 24-month contracts. The corporation provides services to each customer every month. On July 1, 2019, Bigham sold the following customer contracts: Determine the income to be recognized in taxable income in 2019 and 2020.
Cullumber Company deducts insurance expense of $246000 for tax purposes in 2025, but the expense is not yet recognized for accounting purposes. In 2026, 2027, and 2028, no insurance expense will be deducted for tax purposes, but $82000 of insurance expense will be reported for accounting purposes in each of these years. Cullumber Company has a tax rate of 20% and income taxes payable of $204000 at the end of 2025. There were no deferred taxes at the beginning of 2025. What is the deferred tax liability at the end of 2025? O $40800 0000 $49200 $21000 O $0
Egolf Corporation failed to include $380,000 of taxable interest income on its 2022 calendar year Form 1120. The gross income reported on the return was $6.0 million, and the return was filed on February 20, 2023. Required: a. What is the last day on which the IRS may assess additional tax for Egolf's 2022 taxable year? b. Assume Egolf only reported $1.3 million in gross income on its 2022 calendar year return. What is the last date on which the IRS may assess additional tax for 2022? Complete this question by entering your answers in the tabs below. Required A Required B What is the last day on which the IRS may assess additional tax for Egolf's 2022 taxable year? Due date for assessment of additional tax is Required A Required B
Oriole Company deducts insurance expense of $183000 for tax purposes in 2021, but the expense is not yet recognized for accounting purposes. In 2022, 2023, and 2024, no insurance expense will be deducted for tax purposes, but $61000 of insurance expense will be reported for accounting purposes in each of these years. Oriole Company has a tax rate of 20% and income taxes payable of $162000 at the end of 2021. There were no deferred taxes at the beginning of 2021.What is the amount of the deferred tax liability at the end of 2021? $32400 $0 $10500 $36600
For the year ended December 31, 2019, Nelson Co.’s income statement showed income of $435,000 before income tax expense. To compute taxable income, the following differences were noted: Income from tax-exempt municipal bonds $50,000 Depreciation deducted for tax purposes in excess of depreciation recorded on the books 120,000 Proceeds received from life insurance on death of an insured employee 100,000 Corporate tax rate for 2019 30% Enacted tax rate for future periods 35% Required: 1. Calculate taxable income and tax payable for tax purposes. 2. Prepare Nelson’s income tax journal entry at the end of 2019.
Current Cullumber Corporation began operations in 2025 and reported pretax financial income of $226,000 for the year. Cullumber's tax depreciation exceeded its book depreciation by $39,000. Cullumber's tax rate for 2025 and years thereafter is 30%. Assume this only difference between Cullumber's pretax financial income and taxable income. Prepare the journal entry to record the income tax expense, deferred income taxes, and income taxes payable. (List all debit en before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit Show how the deferred tax liability will be classified on the December 31, 2025, balance sheet. Deferred tax liability should be classified as a on the December 31, 2025, balance sheet.
Jennings Inc. reported the following pretax income (loss) and related tax rates during the years 2019–2022. Pretax Income (loss) Tax Rate 2019 $80,000 40 % 2020 (180,000) 40 % 2021 230,000 20 % 2022 100,000 20 % Pretax financial income (loss) and taxable income (loss) were the same for all years since Jennings began business. The tax rates from 2019–2022 were enacted in 2019. Prepare the portion of the income statement, starting with “Operating loss before income taxes,” for 2020. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

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