Isaac Incorporated began operations in January 2024. For some property sales, Isaac recognizes income in the period of sale for financial reporting purposes. However, for income tax purposes, Isaac recognizes income when it collects cash from the buyer's installment payments. In 2024, Isaac had $655 million in sales of this type. Scheduled collections for these sales are as follows: 2024 2025 2026 2027 2028 $ 64 million 124 million 140 million 155 million 172 million $ 655 million Assume that Isaac has a 30% income tax rate and that there were no other differences in income for financial statement and tax purposes. Suppose that, in 2025, legislation revised the income tax rates so that Isaac would be taxed in 2026 and beyond at 25%, rather than 30%. Assume that there were no other differences in income for financial statement and tax purposes. Ignoring operating expenses and additional sales in 2025, what deferred tax liability would Isaac report in its year-end 2025 balance sheet? Note: Round your answer to the nearest whole million.

Isaac Incorporated began operations in January 2024. For some property sales, Isaac recognizes income in the period of sale for financial reporting purposes. However, for income tax purposes, Isaac recognizes income when it collects cash from the buyer's installment payments. In 2024, Isaac had $655 million in sales of this type. Scheduled collections for these sales are as follows: 2024 2025 2026 2027 2028 $ 64 million 124 million 140 million 155 million 172 million $ 655 million Assume that Isaac has a 30% income tax rate and that there were no other differences in income for financial statement and tax purposes. Suppose that, in 2025, legislation revised the income tax rates so that Isaac would be taxed in 2026 and beyond at 25%, rather than 30%. Assume that there were no other differences in income for financial statement and tax purposes. Ignoring operating expenses and additional sales in 2025, what deferred tax liability would Isaac report in its year-end 2025 balance sheet? Note: Round your answer to the nearest whole million.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter17: Corporations: Introduction And Operating Rules

Section: Chapter Questions

Problem 47P

See similar textbooks

Similar questions

Isaac Incorporated began operations in January 2024. For some property sales, Isaac recognizes income in the period of sale for financial reporting purposes. However, for income tax purposes, Isaac recognizes income when it collects cash from the buyer's installment payments. In 2024, Isaac had $642 million in sales of this type. Scheduled collections for these sales are as follows: 2024 $71 million 2025 129 million 2026 123 million 2027 157 million 2028 162 million $ 642 million Assume that Isaac has a 25% income tax rate and that there were no other differences in income for financial statement and tax purposes. Ignoring operating expenses, what deferred tax liability would Isaac report in its year - end 2024 balance sheet?
Isaac Inc. began operations in January 2021. For some property sales, Isaac recognizes income in the period of sale for financial reporting purposes. However, for income tax purposes, Isaac recognizes income when it collects cash from the buyer's installment payments. In 2021, Isaac had $676 million in sales of this type. Scheduled collections for these sales are as follows: 2021 $ 83 million 2022 137 million 2023 129 million 2024 162 million 2025 165 million $ 676 million Assume that Isaac has a 25% income tax rate and that there were no other differences in income for financial statement and tax purposes. Ignoring operating expenses, what deferred tax liability would Isaac report in its year-end 2021 balance sheet?
Isaac Inc. began operations in January 2021. For some property sales, Isaac recognizes income in the period of sale for financial reporting purposes. However, for income tax purposes, Isaac recognizes income when it collects cash from the buyer's installment payments.In 2021, Isaac had $600 million in sales of this type. Scheduled collections for these sales are as follows: 2021 $ 60 million 2022 120 million 2023 120 million 2024 150 million 2025 150 million $ 600 million Assume that Isaac has a 25% income tax rate and that there were no other differences in income for financial statement and tax purposes. Ignoring operating expenses and additional sales in 2022, what deferred tax liability would Isaac report in its year-end 2022 balance sheet?
Please explain how you get the journal entries below. The DeVille Company reported pretax accounting income on its income statement as follows: 2021 $ 355,000 2022 275,000 2023 345,000 2024 385,000 Included in the income of 2021 was an installment sale of property in the amount of $30,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $12,000 in 2022, $15,000 in 2023, and $3,000 in 2024.Included in the 2023 income was $10,000 interest from investments in municipal governmental bonds.The enacted tax rate for 2021 and 2022 was 40%, but during 2022, new tax legislation was passed reducing the tax rate to 25% for the years 2023 and beyond.Required:Prepare the year-end journal entries to record income taxes for the years 2021–2024. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Greenville Industries uses the accrual basis to account for all sales transactions. Sales for 2022 total $500,000. Included in this amount is $70,000 in receivables from sales on installment. Installment sales are considered revenue for book purposes, but not for tax purposes. Operating expenses total $170,000 and are treated the same for book and tax purposes. Assuming a 40% tax rate, what is the amount of Greenville's deferred tax asset or liability? OA. $14,000 deferred tax liability B. $28,000 deferred tax liability OC. $28,000 deferred tax asset OD. $14,000 deferred tax asset
Book Sherrod, Incorporated, reported pretax accounting income of $82 million for 2024. The following information relates to differences between pretax accounting income and taxable income: a. Income from installment sales of properties included in pretax accounting income in 2024 exceeded that reported for tax purposes by $7 million. The installment receivable account at year-end 2024 had a balance of $8 million (representing portions of 2023 and 2024 installment sales), expected to be collected equally in 2025 and 2026. b. Sherrod was assessed a penalty of $3 million by the Environmental Protection Agency for violation of a federal law in 2024. The fine is to be paid in equal amounts in 2024 and 2025. c. Sherrod rents its operating facilities but owns one asset acquired in 2023 at a cost of $84 million. Depreciation is reported by the straight-line method, assuming a four-year useful life. On the tax return, deductions for depreciation will be more than straight- line depreciation the…
Maryanne had gross income of $100,000 in 2022. In 2022, the Maryanne paid the following expenses: Federal income taxes: $11,884 State & local income taxes: $9,756 Sales tax: $1,732 HSA contributions: $2,600 Property taxes on principal residence: $10,046 Mortgage interest on principal residence acquisition indebtedness (mortgage principal is $500,000): $9,793 What is the amount of Maryanne’s total itemized deductions for 2022?
Sunland, Inc. had pre-tax accounting income of $3300000 and a tax rate of 20% in 2021, its first year of operations. During 2021 the company had the following transactions: Received rent from Jane, Co. for 2022 $102000 Municipal bond income $126000 Depreciation for tax purposes in excess of book depreciation $66000 Installment sales profit to be taxed in 2022 $168000 For 2021, what is the amount of income taxes payable for Sunland, Inc?
Cullumber, Inc. had pre-tax accounting income of $3900000 and a tax rate of 20% in 2021, its first year of operations. During 2021 the company had the following transactions: Received rent from Jane, Co. for 2022 $108000 Municipal bond income $132000 Depreciation for tax purposes in excess of book depreciation $72000 Installment sales profit to be taxed in 2022 $174000 For 2021, what is the amount of income taxes payable for Cullumber, Inc? $824400 $726000 $752400 $682800
Xenun Inc. uses the accrual method of accounting for financial reporting purposes and appropriately uses the installment method of accounting for income tax purposes. Profits of $1,200,000 recognized for books in 2020 will be collected in the following years: Collection of Profits $200,000 $400,000 2021 2022 2023 $600,000 The enacted tax rate is 30% for 2020 and 2021. The enacted tax rate is 35% for 2022 and 2023. Prepared the necessary journal entries for 2020, 2021, 2022, and 2023.
Tamarisk Inc. had pretax financial income of $139,400 in 2025. Included in the computation of that amount is insurance expense of $4,400 which is not deductible for tax purposes. In addition, depreciation for tax purposes exceeds accounting depreciation by $10,000. Prepare Tamarisk's journal entry to record 2025 taxes, assuming a tax rate of 30%. (List all debit entries before credit entries. 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 O for the amounts.) Account Titles and Explanation Debit Credit
Sheridan, Inc. had pre-tax accounting income of $3200000 and a tax rate of 20% in 2021, its first year of operations. During 2021 the company had the following transactions: Received rent from Jane, Co. for 2022 $101000 Municipal bond income $125000 Depreciation for tax purposes in excess of book depreciation $65000 Installment sales profit to be taxed in 2022 $167000 At the end of 2021, which of the following deferred tax accounts and balances exist at December 31, 2021?