In 2020, Uniontown Books had EBIT equal to -$950,000. In 2021, its EBIT was $2,200,000. The company has no debt, and therefore, pays no interest expense. Its corporate tax rate is 25%. What was Uniontown’s tax liability for 2021? (Assume that the company takes full advantage of the carry-forward provision.)
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In 2020, Uniontown Books had EBIT equal to -$950,000. In 2021, its EBIT was $2,200,000.
The company has no debt, and therefore, pays no interest expense. Its corporate tax rate is 25%. What was Uniontown’s tax liability for 2021? (Assume that the company takes full advantage of the carry-forward provision.)
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- Accounting Muckingjay Inc. opened in 2022. The company reported sales revenue of $486,000 and expenses of $574,000. The revenue is on account, and no cash has been received or paid out for expenses. There are no permanent or temporary differences, so the book loss and taxable loss will be the same. Muckingjay plans to carry forward the net operating loss (NOL). The company has a 38% tax rate, and a valuation allowance is not required. Prepare the following for 2022: a) The necessary journal entry to record the NOL carryforward. b) A partial income statement beginning with sales revenue.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.Giada Foods reported $970 million in income before income taxes for 2021, its first year of operations. Tax depreciation exceeded depreciation for financial reporting purposes by $130 million. The company also had non-tax-deductible expenses of $92 million relating to permanent differences. The income tax rate for 2021 was 25%, but the enacted rate for years after 2021 is 30%. The balance in the deferred tax liability in the December 31, 2021, balance sheet is:
- Pearl Inc. incurred a net operating loss of $455,000 in 2020. The tax rate for all years is 20%. Assume that it is more likely than not that the entire net operating loss carryforward will not be realized in future years. Prepare all the journal entries necessary at the end of 2020. (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.)On July 31, 2021, ABC Company borrowed from a bank via issuing a 13.2% note. Transaction costs of P45,000 related to the borrowing was paid. The note was irrevocably designated at fair value for measuring purposes. Analyzing the changes in the fair value at yearend, P50,000 was not attributable to credit risk.The net effects of the note are the following: P264,500 loss for the 2021 Income Statement and P234,500 loss on the 2021 Statement of Comprehensive Income.Questions:1. How much is the interest expense for 2020?2. How much is the face value of the note?3. How much is the fair value of the note at yearend 2021?Improved Shoes Company recorded book income of $100,000 in 2020. It does not have any permanent differences, and the only temporary difference relates to a $75,000 installment sale that it recorded for book purposes. Improved Shoes anticipates collecting the installment sales equally over the following 2 years. The current enacted tax rate is 40%. The substantively enacted tax rates for the following 3 years are 42%, 45%, and 45%, respectively. What deferred tax amount should Improved Shoes record for this temporary difference under U.S. GAAP? The book basis of the installment sales receivable from the installment sales is rate Improved Shoes Company will use to calculate the deferred tax amount is record a deferred tax- in the amount of than the tax basis of the asset. The tax Therefore, Improved Shoes will
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- 2. For the year 2021, Rattner Robotics had $5 million in operating income (EBIT). Its depreciation expense was $1.5 million, its interest expense was $1 million, and its corporate tax rate was 35%. At the end of year 2021, it had $10 million in operating current assets, $3 million in accounts payable, $1 million in accruals, and $2 million in notes payable. Assume Rattner has no excess cash and no other current liabilities. Assume that Rattner's only noncash item was depreciation. a) What was the company's net income for the year 2021?tion bona 158 b) What was its net operating working capital (NOWC) for the year 2021? c) Rattner reported $4 million in capital expenditure for the year of 2021. Rattner's NOWC for the prior year (year 2020) is $5.5 million. What is the company's free cash flow (FCF) for the year of 2021? (Hint: you need your results from part b to calculate this question).In 2020, Garner Grocers had taxable income of -$2,000,000. The corporate tax rate is 25%. Assume that the company takes full advantage of the Tax Code's carry-forward provision. In 2021, Garner has taxable income of $1,000,000. What is the amount of taxes the company paid in 2021? a. $500,000 b. $0 c. $250,000 d. $1,500,000 e. $750,000J-Matt, Inc., had pretax accounting income of $331,000 and taxable income of $376,000 in 2021. The only difference between accounting and taxable income is estimated product warranty costs of $45,000 for sales in 2021. Warranty payments are expected to be in equal amounts over the next three years (2022–2024) and will be tax deductible at that time. Recent tax legislation will change the tax rate from the current 25% to 20% in 2023. Determine the amounts necessary to record J-Matt’s income taxes for 2021 and prepare the appropriate journal entry.