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.
During 2018, its first year of operations, Baginski Steel Corporation reported a net operating loss of $375,000 forfinancial reporting and tax purposes. The enacted tax rate is 40%.Required:1. Prepare the journal entry to recognize the income tax benefit of the net operating loss. Assume the weight ofavailable evidence suggests future taxable income sufficient to benefit from future deductible amounts fromthe net operating loss carryforward.2. Show the lower portion of the 2018 income statement that reports the income tax benefit of the net operatingloss.
During 2016, its first year of operations, Baginski Steel Corporation reported a net operating loss of $375,000 for financial reporting and tax purposes. The enacted tax rate is 40%. Required: 1. Prepare the journal entry to recognize the income tax benefit of the net operating loss. Assume the weight of available evidence suggests future taxable income sufficient to benefit from future deductible amounts from the net operating loss carryforward. 2. Show the lower portion of the 2016 income statement that reports the income tax benefit of the net operating loss.
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…
Ayres Services acquired an asset for $116 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: (S in millions) 2019 $ 420 $ 440 $ 455 29.0 2018 2020 2021 $ 490 Pretax accounting income Depreciation on the income statement Depreciation on the tax return 29.0 29.0 29.0 (34.0) (42.0) (24.0) 415 $ 427 (16.0) $ 503 Taxable income $ 460 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 be entered as 5.5).) Beginning of 2018 End of…
At the end of 2017, Payne Industries had a deferred tax asset account with a balance of $30 million attributableto a temporary book-tax difference of $75 million in a liability for estimated expenses. At the end of 2018, thetemporary difference is $70 million. Payne has no other temporary differences. Taxable income for 2018 is $180million and the tax rate is 40%.Payne has a valuation allowance of $10 million for the deferred tax asset at the beginning of 2018.Required:1. Prepare the journal entry(s) to record Payne’s income taxes for 2018, assuming it is more likely than not thatthe deferred tax asset will be realized.2. Prepare the journal entry(s) to record Payne’s income taxes for 2018, assuming it is more likely than not thatone-fourth of the deferred tax asset will ultimately be realized.
NSync Manufacturing has a deferred tax asset account with a balance of P300,000 at the end of 2015 due to a single cumulative temporary difference of P 750,00. At the end of 2016, this same temporary difference has increased to a cumulative amount of P1,000,000. Taxable income for 2016 is P1,700,000. The tax rate is 40% for 2016, but enacted tax rates for all future years are 35%. Assuming it’s probable that 70% of the deferred tax asset will be realized, what amount will be reported on NSync manufacturing statement of financial position for the deferred tax asset at December 31, 2016
Ayres Services acquired an asset for $96 million in 2021. The asset is depreciated for financial reporting purposes over four years on a straight-line basis (no residual value). Ayers deducted 100% of the asset's cost for income tax reporting in 2021. The enacted tax rate is 25% Amounts for pretax accounting income, depreciation, and taxable income in 2021, 2022, 2023, and 2024 are as follows: Pretax accounting income Depreciation on the income statement Depreciation on the tax return Taxable income 2021 $380 24 (96) Cumulative Temporary Difference Deferred Tax Liability $308 ($ in millions) 2023 2024 2022 $400 24 (0) (0) $415 $450 24 24 (0) $424 $439 $474 Required: For December 31 of each year, determine (a) the cumulative 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. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should…
Ayres Services acquired an asset for $96 million in 2021. The asset is depreciated for financial reporting purposes over four years on a straight-line basis (no residual value). Ayers deducted 100% of the asset's cost for income tax reporting in 2021. The enacted tax rate is 25%. Amounts for pretax accounting income, depreciation, and taxable income in 2021, 2022, 2023, and 2024 are as follows: ($ in millions) 2021 2022 2023 2024 Pretax accounting income $ 480 $ 500 $ 515 $ 550 Depreciation on the income statement 24 24 24 24 Depreciation on the tax return (96 ) (0 ) (0 ) (0 ) Taxable income $ 408 $ 524 $ 539 $ 574 Required:For December 31 of each year, determine (a) the cumulative 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. Enter your answers…
Ayres Services acquired an asset for $64 million in 2021. The asset is depreciated for financial reporting purposes over four years on a straight-line basis (no residual value). Ayers deducted 100% of the asset's cost for income tax reporting in 2021. The enacted tax rate is 25%. Amounts for pretax accounting income, depreciation, and taxable income in 2021, 2022, 2023, and 2024 are as follows: ($ in millions) 2022 $380 16 (0) $396 Pretax accounting income Depreciation on the income statement Depreciation on the tax return 2021 $360 16 2023 $395 16 2024 $430 16 (0) (64) $312 (0) Taxable income $411 $446 Required: For December 31 of each year, determine (a) the cumulative 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 "O" wherever applicable. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) Beginning of 2021 End of 2021 End…
Jin Company’s income tax return showed taxable income of P4,000,000 on which a tax liability of P1,200,000 has been recognized. Additional information are as follows: * Accelerated depreciation for income tax purposes was P500,000. Straight-line financial depreciation on the assets is P400,000. * Goodwill impairment loss of P300,000 was not included as a deduction in the tax return but may be deducted in the income statement. * Interest income on treasury bills was not included in the tax return.During the year, P600,000 was received on these investments. What is the pretax financial income of Jin? a. P4,100,000 b. P4,200,000 c. P4,300,000 d. P4,400,000

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