Mallock Incorporated reports net operating income (loss) for financial reporting and tax purposes in each year as follows ($ in thousands): 2016 2017 $ 250 $ 40 2018 $0 2019 $0 2020 $ (330) 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.

Mallock Incorporated reports net operating income (loss) for financial reporting and tax purposes in each year as follows ($ in thousands): 2016 2017 $ 250 $ 40 2018 $0 2019 $0 2020 $ (330) 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.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 4P: Interperiod Tax Allocation Klerk Company had four temporary differences between its pretax financial...

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Comprehensive Colt Company reports pretax financial income of 143,000 in 2019. In addition to pretax income from continuing operations (of which revenues are 295,000), the following items are included in this pretax income: Colts taxable income totals 93,000 in 2019. The difference between the pretax financial income and the taxable income is due to the excess of tax depreciation over financial depreciation on assets used in continuing operations. At the beginning of 2019, Colt had a retained earnings balance of 310.000 and a deferred tax liability of 8,100. During 2019, Colt declared and paid dividends of 48,000. It is subject to tax rates of 15% on the first 50,000 of income and 30% on income in excess of 50,000. Based on proper interperiod tax allocation procedures, Colt has determined that its 2019 ending deferred tax liability is 14,100. Required: 1. Prepare a schedule for Colt to allocate the total 2019 income tax expense to the various components of pretax income. 2. Prepare Colts income tax journal entry at the end of 2019. 3. Prepare Colts 2019 income statement. 4. Prepare Colts 2019 statement of retained earnings. 5. Show the related income tax disclosures on Colts December 31, 2019, balance sheet.
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.
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
Quince Corporation has taxable income of $485,000 for its calendar tax year. Calculate the corporation's income tax liability for 2019 before tax credits. $________________
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
Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and taxable income for 2020. The prior period adjustment was the result of an error in calculating bad debt expense for 2019. The current tax rate is 30%, and no change in the tax rate has been enacted for future years. When the company applies intraperiod income tax allocation, the prior period adjustment will be shown on the: a. income statement at 12,000 b. income statement at 8,400 (net of 3,600 income taxes) c. retained earnings statement at 12,000 d. retained earnings statement at 8,400 (net of 3,600 income taxes)
Interperiod Tax Allocation Peterson Company has computed its pretax financial income to be 66,000 in 2019 after including the effects of the appropriate items from the following information: Petersons accountant has prepared the following schedule showing the future taxable and deductible amounts at the end of 2019 for its three temporary differences: At the beginning of 2019, Peterson had a deferred tax liability of 12,540 related to the depreciation difference and 4,710 related to the accrual-basis sales difference. In addition, it had a deferred tax asset of 14,850 related to the warranty difference. The current tax rate is 30%, and no change in the tax rate has been enacted for future years. Required: 1. Compute Petersons taxable income for 2019. 2. Prepare Petersons income tax journal entry for 2019 (assume no valuation allowance is necessary). 3. Next Level Identify the permanent differences in Items 1 through and explain why you did or did not account for them as deferred tax items in Requirement 2.
Interperiod Tax Allocation Klerk Company had four temporary differences between its pretax financial income and its taxable income during 2019 as follows: At the beginning of 2019, Klerk had a deferred tax liability of 84,300 related to Temporary Difference #2 and a deferred tax asset of 21,090 related to Temporary Difference #4. Based on its tax records, Klerk earned taxable income of 270,000 for 2019. Kerks accountant has prepared the following schedule showing the total future taxable and deductible amounts at the end of 2019 for its four temporary differences: The company has a history of earning income and expects to be profitable in the future. The income tax rate for 2019 is 40%, but in 2018 Congress enacted a 30% tax rate for 2020 and future years. During 2019, for financial accounting purposes, Klerk reported revenues of 750,000 and expenses of 447,100. The deferred taxes related to Temporary Differences #1, #2, and #4 are considered to be noncurrent by the company; the deferred tax related to Temporary Difference #3 is considered to be current. Required: 1. Prepare Klerks income tax journal entry for 2019. 2. Prepare a condensed 2019 income statement for Klerk. 3. Show how the income tax items are reported on Klerks December 31, 2019, balance sheet.
Balance Sheet Presentation Thiel Company reports the following deferred tax items at the end of 2019: Required: Show how the preceding deferred tax items are reported on Thiels December 31, 2019, balance sheet.
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.
Mallock Incorporated reports net operating income (loss) for financial reporting and tax purposes in each year as follows ($ in thousands): 2016 2017 2018 2019 2020 $ 270 $ 60 $ 0 $ 0 $ (350) 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 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). Show less
Mallock Incorporated reports net operating income (loss) for financial reporting and tax purposes in each year as follows ($ in thousands): D 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. 2016 $ 160 2017 $ 50 2018 $ 0 2019 $ 0 2020 $ (240)