**Deferred Tax Liability Calculation Example****Scenario:**Larkspur Corporation began operations in 2020 and reported pretax financial income of $206,000 for the year. Larkspur's tax depreciation exceeded its book depreciation by $33,000. Larkspur's tax rate for 2020 and subsequent years is 30%. In its December 31, 2020, balance sheet, what amount of deferred tax liability should be reported?**Calculation:**To find the deferred tax liability, follow these steps:1. Determine the difference between tax depreciation and book depreciation.2. Multiply this difference by the tax rate.**Formula:**\[ \text{Deferred Tax Liability} = \text{Difference in Depreciation} \times \text{Tax Rate} \]Given:- Difference in depreciation = $33,000- Tax rate = 30%**Calculation:**\[ \text{Deferred Tax Liability} = 33,000 \times 0.30 \]\[ \text{Deferred Tax Liability} = 9,900 \]Thus, the amount of deferred tax liability to be reported is $9,900.**Deferred Tax Liability to be reported:**\[ \boxed{\$9,900} \]This represents the tax that the company will defer to future periods due to the difference in depreciation methods for tax and book purposes.

Depreciation expense is a kind of operating expense that is reported at the end of the periodic…

Larkspur Corporation began operations in 2020 and reported pretax financial income of $206,000 for the year. Larkspur's tax depreciation exceeded its book depreciation by $33,000. Larkspur's tax rate for 2020 and years thereafter is 30%. In its December 31, 2020, balance sheet, what amount of deferred tax liability should be reported? Deferred tax liability to be reported $

Larkspur Corporation began operations in 2020 and reported pretax financial income of $206,000 for the year. Larkspur's tax depreciation exceeded its book depreciation by $33,000. Larkspur's tax rate for 2020 and years thereafter is 30%. In its December 31, 2020, balance sheet, what amount of deferred tax liability should be reported? Deferred tax liability to be reported $

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Teal Corporation began operations in 2020 and reported pretax financial income of $224,000 for the year. Teal’s tax depreciation exceeded its book depreciation by $44,000. Teal’s tax rate for 2020 and years thereafter is 30%. In its December 31, 2020, balance sheet, what amount of deferred tax liability should be reported? Deferred tax liability to be reported $enter the deferred tax liability to be reported
Carla Vista Corporation began 2025 with a $54,280 balance in the Deferred Tax Liability account. At the end of 2025, the related cumulative temporary difference amounts to $413,000, and it will reverse evenly over the next two years. Pretax accounting income for 2025 is $619,500 , the tax rate for all years is 20%, and taxable income for 2025 is $477,900. Compute income taxes payable for 2025
Indigo Corporation began operations in 2020 and reported pretax financial income of $234,000 for the year. Indigo’s tax depreciation exceeded its book depreciation by $33,000. Indigo’s tax rate for 2020 and years thereafter is 30%. In its December 31, 2020, balance sheet, what amount of deferred tax liability should be reported?
During 2024, its first year of operations, Baginski Steel Corporation reported a net operating loss of $360,000 for financial reporting and tax purposes. During 2025, Baginski reported income of $200,000 for financial reporting and tax purposes. The enacted tax rate is 25%. Required: - Prepare the journal entry to recognize Baginski's 2025 tax expense or tax benefit. Show the lower portion of the 2025 income statement that reports income tax expense or benefit.
Mallock Incorporated reports net operating income (loss) for financial reporting and tax purposes in each year as follows ($ in thousands): 2016 $ 160 2017 $ 50 2018 $ 0 2019 2020 $ 0 $ (240) Mallock's federal tax rate decreased from 35% to 21% starting in 2018. Mallock accounts for its 2020 NOL under the CARES Act. Required: 1. Prepare the appropriate journal entry to record Mallock's 2020 income taxes. 2. Show the lower portion of the 2020 income statement that reports income tax expense or benefit. Complete this question by entering your answers in the tabs below.
Foster Company reported pretax financial income of $350,000 for 2021. Foster uses an accelerated form of depreciation for tax purposes, and it exceeds book depreciation by $50,000. The tax rate for 2021 is 20%. Record the journal entry at the end of 2021, be sure to include calculations, as well as income tax expense, a deferred account, and income tax payable.
For the year 2020, Tonkatsu Company reported income tax expense of P110,000. Income tax payable at the end of 2019 was P90,000 and at the end of 2020 was P100,000. The deferred tax liability that resulted from the use of accelerated depreciation for tax purposes and the straight-line method for financial reporting purposes increased from P105,000 at the beginning of 2020 to P130,000 at the end of 2020. How much cash was paid for income taxes during the year?
Gadubhi
The following information is available for Oriole Corporation for 2025. 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $114,000. This difference will reverse in equal amounts of $28,500 over the years 2026-2029. Interest received on municipal bonds was $10,200. Rent collected in advance on January 1, 2025, totaled $61,800 for a 3-year period. Of this amount, $41,200 was reported as unearned at December 31, 2025, for book purposes. 2. 3. 4. The tax rates are 20% for 2025 and 17% for 2026 and subsequent years. 5. Income taxes of $154,000 are due per the tax return for 2025. 6. No deferred taxes existed at the beginning of 2025 (a) (b) (c) Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2025 and 2026. Assume taxable income was $426,000 in 2026. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not…
In 2023, Windsor Ltd., which follows IFRS, reported accounting income of $1,130,000 and the 2023 tax rate was 20%. Windsor had two timing differences for tax purposes: CCA on the company's tax return was $512,000. Depreciation expense on the financial statements was $308,000. These amounts relate to assets that were acquired on January 1, 2023, for $2,048,000. Accrued warranty expense for financial statement purposes was $140,600 (accrued expenses are not deductible for tax purposes). This is the first year Windsor offers warranties. Both of these timing differences are expected to fully reverse over the next four years, as follows: Year Depreciation Difference Warranty Expense Rate 2024 $70,500 $20,500 20% 2025 57,500 29,900 20% 2026 40,500 39,600 18% 2027 35,500 50,600 18% $204,000 $140,600
Marigold Corporation began 2020 with a $39,560 balance in the Deferred Tax Liability account. At the end of 2020, the related cumulative temporary difference amounts to $301,000, and it will reverse evenly over the next 2 years. Pretax accounting income for 2020 is $451,500, the tax rate for all years is 20%, and taxable income for 2020 is $348,300. - (a) Compute income taxes payable for 2020. Income taxes payable e Click if you would like to Show Work for this question: Open Show Work

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