Mini, Inc., earns pretax book net income of $1,132,000 in 2020, its first year of operations. Mini recognized $160,400 in bad debt expense for book purposes. This expense is not yet deductible for tax purposes. Mini reports no other temporary or permanent differences. The U.S. Federal corporate income tax rate is 21%, and Mini earns an after-tax rate of return on capital of 8%. Enter below the 2020 deferred tax expense, total tax expense, and deferred tax assets and liabilities. Balance Sheet Deferred tax asset Income Statement Deferred tax benefit Mini's total tax expense will be: Current tax expense Deferred tax benefit Total tax expense

Mini, Inc., earns pretax book net income of $1,132,000 in 2020, its first year of operations. Mini recognized $160,400 in bad debt expense for book purposes. This expense is not yet deductible for tax purposes. Mini reports no other temporary or permanent differences. The U.S. Federal corporate income tax rate is 21%, and Mini earns an after-tax rate of return on capital of 8%. Enter below the 2020 deferred tax expense, total tax expense, and deferred tax assets and liabilities. Balance Sheet Deferred tax asset Income Statement Deferred tax benefit Mini's total tax expense will be: Current tax expense Deferred tax benefit Total tax expense

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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Sherrod, Inc., reported pretax accounting income of $70 million for 2021. The following information relates to differences between pretax accounting income and taxable income: Income from installment sales of properties included in pretax accounting income in 2021 exceeded that reported for tax purposes by $4 million. The installment receivable account at year-end 2021 had a balance of $6 million (representing portions of 2020 and 2021 installment sales), expected to be collected equally in 2022 and 2023. Sherrod was assessed a penalty of $1 million by the Environmental Protection Agency for violation of a federal law in 2021. The fine is to be paid in equal amounts in 2021 and 2022. Sherrod rents its operating facilities but owns one asset acquired in 2020 at a cost of $60 million. Depreciation is reported by the straight-line method, assuming a four-year useful life. On the tax return, deductions for depreciation will be more than straight-line depreciation the first two years but…
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Mini, Inc., earns pretax book net income of $1,420,000 in 2021, its first year of operations. Mini recognized $226,400 in bad debt expense for book purposes. This expense is not yet deductible for tax purposes. Mini reports $1,491,000 of pretax book net income in 2022. Mini did not recognize any bad debt expense for book purposes in 2022 but did deduct $169,800 in bad debt expense for tax purposes. Mini reports no other temporary or permanent book-tax differences. The applicable U.S. Federal corporate income tax rate is 21%, and Mini earns an after-tax rate of return on capital of 4%. Enter below the 2022 end-of-year balance in Mini's deferred tax benefit or expense and total tax benefit or expense. If an amount is zero, enter "0". If required, round your answer to nearest whole value. 2022 a. Total tax benefit or expense h. Deferred tax benefit or expense c. In net present value terms, what has been the cost to Mini of the deferred tax deduction for bad debts? The present value factor…
Alvis Corporation reports pretax accounting income of $360,000, but due to a single temporary difference, taxable income is only $220,000. At the beginning of the year, no temporary differences existed.Required:1. Assuming a tax rate of 25%, what will be Alvis’s net income?2. What will Alvis report in the balance sheet pertaining to income taxes?
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