Johnson Manufacturing reported pretax book income of $750,000 in 2024. The following items were included in the computation: • Favorable temporary differences: $80,000 ⚫ Unfavorable temporary differences: $30,000 • • Favorable permanent differences: $70,000 What is the book equivalent of taxable income? a) $820,000 b) $750,000 c) $680,000 d) $700,000
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- Blue Ocean Inc. reported a pretax book income of... Please solve this accounting problemPlease provide this question solution general accountingn 2018 an asset was purchased for $2,000,000. The asset qualified for Initial Allowance. The Initial Allowance (I.A) Rate was 20%. Annual Allowance (A.A) Rate was 10%. The asset was sold in 2020 for $1,000,000. Capital allowance is on the reducing balance basis. The balancing adjustment is: a. A Balancing Allowance b. A Balancing Charge 2. Which of the following statements are NOT correct? i. A registered taxpayer can claim input tax credit for items used for its exempt activities. ii. A registered taxpayer can claim input tax credit for items used for zero-rated activities. iii. The VAT rate Exempt supplies is 0%. iv. Zero-rated goods or services are taxable for VAT at 0%. a. None of the above b. i only c. i, ii and iv d. i, and iii BDF limited as the following supplies: Supplies at standard rate $5,000,000 Supplies at Zero percent $3,000,00 Supplies at 25% $2,000,000 Exempt Supplies $5,000,000 The GCT threshold is…
- Use this information for parts A and B. In 2026, Goodfellas Company reported pretax GAAP income of $400,000. During 2026, Goodfellas had the following differences between GAAP and tax: Recognized $100,000 installment sale revenue under GAAP in 2026. This revenue will be recognized for tax purposes in equal amounts over the next four years. Recognized $50,000 of depreciation in 2026 for tax. Starting in 2027, GAAP depreciation is $10,000 per year for the next five years. Received $100,000 in unearned rent revenue in 2026. Rent will be earned in equal amounts in 2027 and 2028. The tax rate for 2026 is 30 percent and 20 percent thereafter. A) What journal entry does Goodfellas record for taxes in 2026?During 2020, a construction company changed from the completed-contract method to the percentage-of-completion method for accounting purposes but not for tax purposes. Gross profit figures under both methods for the past three years appear below: Completed-Contract Percentage-of-Completion2018 ₱ 475,000 ₱ 700,0002019 625,000 950,0002020 700,000 1,050,000Total ₱1,800,000 ₱2,700,000 Assuming an income tax rate of 40% for all years, the effect of this accounting change on prior periods should be reported by a credit ofa. ₱540,000 on the 2020 income statement.b. ₱330,000 on the 2020 income statement.c. ₱540,000 on the 2020 retained earnings statement.d. ₱330,000 on the 2020 retained earnings statement.Tokwa't Baboy Company prepared the following reconciliation of income per books with income per tax return for the year ended December 31, 2020. Book income before taxes- P750,000Construction contract revenue which will reverse in 2021- P100,000Depreciation expense that will reverse in equal amounts in each of the next five years- (P400,000)Taxable income- P450,000 What amount should Tokwa't Baboy Company report in its 2020 income statement as total provision for income tax? Assume a 30% tax rate.
- On January 1, 2024, Hampton's Construction, Inc. decided to change from the completed-contract method of accounting to the percentage-of-completion method. Hampton will continue to use the completed-contract method for income tax purposes. The following information is available for net income. The income tax rate for all years is 35%.Net Income Year Ended Percentage of Completion Completed Contract December 31, 2022 $145,000 $125,000 December 31, 2023 179,000 159,000 December 31, 2024 267,000 181,000 What is the journal entry to record the change in accounting principle on January 1, 2024? Group of answer choices Retained Earnings 55,900 Deferred Tax Asset 30,100 Construction in Progress86,000 Construction in Progress 40,000 Retained Earnings 40,000 No entry needed. Construction in Progress 40,000 Deferred Tax Liability 14,000 Retained Earnings26,000Presented below are two independent situations related to future taxable and deductible amounts resulting from temporary differences existing at December 31, 2020. 1. Mooney Co. has developed the following schedule of future taxable and deductible amounts. 2021 2022 2023 2024 2025 Taxable amounts $300 $300 $300 $ 300 $300 Deductible amount — — — (1,600) — 2. Roesch Co. has the following schedule of future taxable and deductible amounts. 2021 2022 2023 2024 Taxable amounts $300 $300 $ 300 $300 Deductible amount — — (2,300) — Both Mooney Co. and Roesch Co. have taxable income of $4,000 in 2020 and expect to have taxable income in all future years. The tax rates enacted as of the beginning of 2020 are 30% for 2020–2023 and 35% for years thereafter. All of the underlying temporary differences relate to noncurrent assets and liabilities. Instructions For each of these two situations, compute the net amount of deferred income taxes to be reported at the end of…Subject. Cost Account