Mallock Incorporated reports net operating income (loss) for financial reporting and tax purposes in each year as follows ($ in thousands): 2016 2017 2018 2019 $ 210 $ 50 $0 $0 2020 $ (290) 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. Required 1 Required 2 No 1 Answer is not complete. Prepare the appropriate journal entry to record Mallock's 2020 income taxes. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in thousands (i.e., 5,500 should be entered as 5.5). Transaction 1 General Journal Deferred tax asset Receivable-Income tax refund < Required 1 Required 2 > 33 Debit Credit

Mallock Incorporated reports net operating income (loss) for financial reporting and tax purposes in each year as follows ($ in thousands): 2016 2017 2018 2019 $ 210 $ 50 $0 $0 2020 $ (290) 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. Required 1 Required 2 No 1 Answer is not complete. Prepare the appropriate journal entry to record Mallock's 2020 income taxes. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in thousands (i.e., 5,500 should be entered as 5.5). Transaction 1 General Journal Deferred tax asset Receivable-Income tax refund < Required 1 Required 2 > 33 Debit Credit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The Snella Company reports 2023 Pre-tax Net Income of $10,000. The following items exist: Premiums Paid for Key Officer Life Insurance Accrued Revenues Unearned Revenues $ 200 $ 80 $ 50 The tax rate is 20%, Indicate the amounts for 2023 Income Tax Expense and 12/31/23 Income Tax Payable, respectively: Select one: a. $2,040, $2,034 b. $1,960, $1,934 Oc. $1,960, $1,986 d. $2,040, $1,986 e. $2,034, $2,034
Arndt, Inc. reported the following for 2021 and 2022 ($ in millions): 2021 2022 Revenues $ 888 $ 980 Expenses Pretax accounting income (income statement) Taxable income (tax return) 760 800 $ 128 $ 116 $ 180 $ 200 Tax rate: 25% a. Expenses each year include $30 million from a two-year casualty insurance policy purchased in 2021 for $60 million. The cost is tax deductible in 2021. b. Expenses include $2 million insurance premiums each year for life insurance on key executives. c. Arndt sells one-year subscriptions to a weekly journal. Subscription sales collected and taxable in 2021 and 2022 were $33 million and $35 million, respectively. Subscriptions included in 2021 and 2022 financial reporting revenues were $25 million ($10 million collected in 2020 but not recognized as revenue until 2021) and $33 million, respectively. Hint View this as two temporary differences-one reversing in 2021; one originating in 2021. d. 2021 expenses included a $14 million unrealized loss from reducing…
During 2020, Sheffield Co.'s first year of operations, the company reports pretax financial income at $252,300. Sheffield's enacted tax rate is 45% for 2020 and 20% for all later years. Sheffield expects to have taxable income in each of the next 5 years. The effects on future tax returns of temporary differences existing at December 31, 2020, are summarized as follows. Future Years 2021 2022 2023 2024 2025 Total Future taxable (deductible) amounts: Installment sales Depreciation Unearned rent $31,300 5,800 (48,500) (48,500) $31,300 $31,300 5,800 $5,800 $5,800 $93,900 29,000 (97,000) 5,800 Complete the schedule below to compute deferred taxes at December 31, 2020. (Negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Deferred Tax Future Taxable Temporary Difference (Deductible) Amounts Tax Rate (Asset) Liability $ Installment sales $93,900 1% Depreciation 29,000 1% Unearned rent (97,000) % Totals THA
Jennings Inc. reported the following pretax income (loss) and related tax rates during the years 2019–2022. Pretax Income (loss) Tax Rate 2019 $80,000 40 % 2020 (180,000) 40 % 2021 230,000 20 % 2022 100,000 20 % Pretax financial income (loss) and taxable income (loss) were the same for all years since Jennings began business. The tax rates from 2019–2022 were enacted in 2019. Prepare the portion of the income statement, starting with “Operating loss before income taxes,” for 2020. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Vaughn Company reported the following pretax financial income (loss) for the years 2018-2022. 2018 $259,200 378,000 129,600 (615,600 ) 194,400 2019 2020 2021 2022 Pretax financial income (loss) and taxable income (loss) were the same for all years involved. The enacted tax rate was 34% for 2018 and 2019, and 20% for 2020-2022. Assume the carryback provision is used first for net operating losses.
Please answer it in good accounting form. Thankyou
At the beginning of 2021, a company had future deductible amounts of $400,000 and the enacted tax rate was 27%. In October 2021, a new income tax act is signed into law that lowers the tax rate to 20% for 2022 and future years. To record the change, the company will (enter 1, 2, 3, or 4 that represents the correct answer): Credit Income Tax Expense by $28,000. Debit Income Tax Expense by $28,000. Credit Deferred Tax Liability by $28,000. Debit Deferred Tax Asset by $28,000.
Current Attempt in Progress Wildhorse Inc. reports the following pre-tax incomes (losses) for both financial reporting purposes and tax purposes: Year 2021 2022 2023 2024 Accounting Income (Loss) $129,000 94,000 (302,000) 221,000 Tax Rate 25 % 25 % 30 % 30 % The tax rates listed were all enacted by the beginning of 2021. Wildhorse reports under the ASPE future income taxes method.
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The pretax financial income (or loss) figures for Shamrock Company are as follows. 2017 81,000 2018 (51,000 ) 2019 (35,000 ) 2020 111,000 2021 95,000 Pretax financial income (or loss) and taxable income (loss) were the same for all years involved. Assume a 25% tax rate for 2017 and a 20% tax rate for the remaining years.Prepare the journal entries for the years 2017 to 2021 to record income tax expense and the effects of the net operating loss carryforwards. All income and losses relate to normal operations. (In recording the benefits of a loss carryforward, assume that no valuation account is deemed necessary.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit 2017 enter an account title to record carryback enter a debit amount enter a…
Arndt, Incorporated reported the following for 2024 and 2025 ($ in millions): Revenues. Expenses Pretax accounting income (income statement) Taxable income (tax return) Tax rate: 25% 2024 $888 760 $128 $116 a. Expenses each year include $30 million from a two-year casualty insurance policy purchased in 2024 for $60 million. The cost is tax deductible in 2024. Answer is complete but not entirely correct. Deferred tax amounts ($ in millions) Classification Net noncurrent deferred tax asset ✔ $ Net noncurrent deferred tax liability X $ 2025 $980 800 b. Expenses include $2 million insurance premiums each year for life insurance on key executives. c. Arndt sells one-year subscriptions to a weekly journal. Subscription sales collected and taxable in 2024 and 2025 were $33 million and $35 million, respectively. Subscriptions included in 2024 and 2025 financial reporting revenues were $25 million ($10 million collected in 2023 but not recognized as revenue until 2024) and $33 million,…
The following information has been obtained for Sheridan Corporation. 1. Prior to 2020, taxable income and pretax financial income were identical. 2. Pretax financial income is $1,634,000 in 2020 and $1,359,000 in 2021. On January 1, 2020, equipment costing $1,260,000 is purchased. It is to be depreciated on a straight-line basis over 5 years for tax purposes and over 8 years for financial reporting purposes. (Hint: Use the half-year convention for tax purposes, as discussed in Appendix 11A.) 3. 4. Interest of $57,000 was earned on tax-exempt municipal obligations in 2021. 5. Included in 2021 pretax financial income is a gain on discontinued operations of $195,000, which is fully taxable. 6. The tax rate is 20% for all periods. 7. Taxable income is expected in all future years.