Hi expart Provide solution for this accounting question ai answer not excepted Mozart Inc.'s $98,000 taxable income for 2014 will be taxed at the 40%corporate tax rate. For tax purposes, its depreciation expense exceededthe depreciation used for financial reporting purposes by $27,000. Mozarthas $45,000 of purchased goodwill on its books; during 2014, the companydetermined that the goodwill had suffered a $3,000 impairment of value forfinancial reporting purposes. None of the goodwill impairment is deductiblefor tax purposes. Mozart purchased a three-year corporate liabilityinsurance policy on July 1, 2014, for $36,000 cash. The entire premium wasdeducted for tax purposes in 2014.1. Determine Mozart's pre-tax book income for 2014.2. Determine the changes in Mozart's deferred tax amounts for 2014.3. Calculate tax expense for Mozart Inc. for 2014.

Step 1: Define Taxable IncomeTaxable income is the part of an individual or entity's gross income on…

Answered: Mozart Inc.'s $98,000 taxable income…

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter14: Taxes On The Financial Statements

Section: Chapter Questions

Problem 24CE

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At the end of 2015, Payne Industries had a deferred tax asset account with a balance of $30 million attributable to a temporary book–tax difference of $75 million in a liability for estimated expenses. At the end of 2016, the temporary difference is $70 million. Payne has no other temporary differences and no valuation allowance for the deferred tax asset. Taxable income for 2016 is $180 million and the tax rate is 40%. Required: 1. Prepare the journal entry(s) to record Payne’s income taxes for 2016, assuming it is more likely than not that the deferred tax asset will be realized. 2. Prepare the journal entry(s) to record Payne’s income taxes for 2016, assuming it is more likely than not that one-fourth of the deferred tax asset will ultimately be realized.
At the end of 2016, its first year of operations, Slater Company reported a book value for its depreciable assets of $40,000 for financial reporting purposes and $33,000 for income tax purposes. Slater earned taxable income of $97,000 during 2016. The company is subject to a 30% income tax rate, and no change has been enacted for future years. The depreciation was the only temporary difference between taxable income and pretax financial income. Required: 1. Prepare Slater's income tax journal entry at the end of 2016. 2. Show how the deferred taxes would be reported on Slater's December 31, 2016, balance sheet.
Ayres Services acquired an asset for $82 million in 2018. The asset is depreciated for financial reporting purposes over four years on a straight-line basis (no residual value). For tax purposes the asset's cost is depreciated by MACRS. The enacted tax rate is 40%. Amounts for pretax accounting income, depreciation, and taxable income in 2018, 2019, 2020, and 2021 are as follows: Pretax accounting income Depreciation on the income statement Depreciation on the tax return. Taxable income. ($ in millions) 2019 355 $ 20.5 (33.5) Temporary Difference Deferred Tax Liability 2018 $ 335 $ 20.5 (25.5) $ 330 $ 342 $ 375 2020 2021 370 $ 405 20.5 20.5 (15.5) (7.5) $ 418 Required: Determine (a) the temporary book-tax difference for the depreciable asset and (b) the balance to be reported in the deferred tax liability account. (Leave no cell blank, enter "0" wherever applicable. Show all amounts as positive amounts. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should…
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