Financial accounting Lyons Company deducts insurance expenses of $105,000 for taxpurposes in 2019, but the expense is not yet recognized foraccounting purposes. In 2020, 2021, and 2022, no insuranceexpense will be deducted for tax purposes, but $35,000 ofinsurance expense will be reported for accounting purposes in eachof these years. Lyons Company has a tax rate of 21% and a taxableincome of $225,000 at the end of 2019. There were no deferredtaxes at the beginning of 2019.What is the amount of income tax expense for 2019?a. $69,300b. $54,600c. $105,000d. $90,000

Explanation: The amount of income tax expense for 2019 will be = Current tax expense for 2019 +…

Answered: Lyons Company deducts insurance…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter26: Tax Practice And Ethics

Section: Chapter Questions

Problem 32P

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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
Ironwood Corporation has ordinary taxable income of $65,000 in 2019, and a short-term capital loss of $15,000. What is the corporation's tax liability for 2019? $7,500 $5,250 $10,500 $13,650 None of the above
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.
Incomc Taxes Then Company has been in operation for several years. It has both a deductible and a taxable temporary difference. At the beginning of 2019, its deferred tax asset was 690, and its deferred tax liability was 750. The company expects its lutine deductible amount to be deductible in 2020 and its Inline taxable amount to 1 taxable in 2021. In 2018, Congress enacted income tax rates for future years as follows: 2019, 30%; 2020, 34%; and 2021, 35%. At the end of 2019, Then reported income taxes payable of 25,800, an increase in its deferred tax liability of 300, and an ending balance in its deferred tax asset of 860. Thun has prepared the following schedule of items related to its income taxes for 2019. Required: Fill in the blanks in the preceding schedule. Show your calculations.
Tayla Corporation generated $400,000 of taxable income in the 2019. What is Tayla's corporate tax liability? $71,400 $84,000 $115,600 $0 None of the above
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
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
Blossom Company deducts insurance expense of $171000 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 $57000 of insurance expense will be reported for accounting purposes in each of these years. Blossom Company has a tax rate of 20% and income taxes payable of $154000 at the end of 2021. There were no deferred taxes at the beginning of 2021.What is the amount of income tax expense for 2021? $188200 $190400 $154000 $171000
Wildhorse Company deducts insurance expense of $201000 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 $67000 of insurance expense will be reported for accounting purposes in each of these years. Wildhorse Company has a tax rate of 20% and income taxes payable of $174000 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?
Jenkins Corporation had $675,000 of taxable income for 2018 and $575,000 for 2019. What is the minimum amount that it must submit for each estimated quarterly tax payment to avoid any penalty for underpayment?
Crane Corporation has one temporary difference at the end of 2020 that will reverse and cause taxable amounts of $56,200 in 2021, $61,000 in 2022, and $66,500 in 2023. Crane’s pretax financial income for 2020 is $285,200, and the tax rate is 30% for all years. There are no deferred taxes at the beginning of 2020. Prepare the income tax expense section of the income statement for 2020, beginning with the line “Income before income taxes.”. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Crane CorporationIncome Statement (Partial)choose the accounting period Income before income taxes $285,200 select an opening section name select an income statement item $enter a dollar amount…
ABC Corporation computed a pretax financial income of $6,000,000 for the year ended December 31, 2019. In preparing the tax return, the following differences are noted between financial income and taxable income: Nontaxable revenue, $600,000; Nondeductible expense, $200,000 Provision for a warranty that was recognized as an expense in 2019 but deductible for tax when paid $300,000; Excess tax depreciation over financial depreciation; $250,000 Excess of financial revenue over tax revenue, $200,000. What is the total tax expense assuming the tax rate for 2019 is 32% and 2020 is 30%? Option A: $1,699,000 Option B: $1,789,000Option C: $1,744,000Option D: $1,792,000

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