n June 30, 2021, Line Company incurred a P100,000 net loss from disposal of a business segment. Also, on June 30, 2021, the entity paid P40,000 for property taxes assessed for 2021. What amount should be included in the determination of net income or loss for the six-month interim period ended June 30, 2021? CHOICES: P140,000 P120,000 P100,000

n June 30, 2021, Line Company incurred a P100,000 net loss from disposal of a business segment. Also, on June 30, 2021, the entity paid P40,000 for property taxes assessed for 2021. What amount should be included in the determination of net income or loss for the six-month interim period ended June 30, 2021? CHOICES: P140,000 P120,000 P100,000

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter12: Tax Credits And Payments

Section: Chapter Questions

Problem 23P

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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
Refer to the information for Cox Inc. above. What amount would Cox record as depreciation expense at December 31, 2020, if the double-declining-balance method were used? a. $187,200 b. $192,000 c. $195,200 d. $312, 000
Refer to the information for Cox Inc. above. What amount would Cox record as depreciation expense for 2019 if the units-of-production method were used ( Note: Round your answer to the nearest dollar)? a. $179,400 b. $184,000 c. $218,400 d. $224,000
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)
Temporary and Permanent Differences Lin has just completed its first year of operations and has a number of differences between its pretax financial income and taxable income. The differences at the end of 2019 are as follows: a. Lin recorded 7,000 of interest revenue on municipal bonds during 2019. b. 15,000 of accrual-basis sales were recognized in income during 2019. They are expected to be received in cash during January 2020. c. Depreciation on machinery totaled 28,000 using straight-line depreciation for financial statements. Lins tax accountant recorded 36,000 of depreciation on the companys tax return. d. Lin was fined 3,000 for violating certain labor laws during 2019. Lin paid the fine during 2019 and agreed to ensure future violations would not occur. e. Bryant Corporation has agreed to rent space from Lin in 2020. In December 2019, Lin received 7,500 from Bryant in advance for rent. f. For 2019, Lin reported 9,500 of warranty expense on its income statement. The companys warranty liability at the end of 2019 was 6,250. Lin expects additional warranty costs to be paid during 2020. Required: 1. For each item, determine if it results in a temporary or permanent difference. If the item results in a temporary difference, determine if it results in a deferred tax asset or deferred tax liability. 2. For each item, determine if it initially results in pretax financial income being greater than or less than taxable income. 3. Next Level Discuss why permanent differences do not impact future periods taxable income and how these differences affect tax rates.
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
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.
On June 30, 2021, Line Company incurred a P100,000 net loss from disposal of a business segment. Also, on June 30, 2021, the entity paid P40,000 for property taxes assessed for 2021. What amount should be included in the determination of net income or loss for the six-month interim period ended June 30, 2021? A. 90,000 B. 100,000 C. 140,000 D. 120,000
On June 30, 2021, Mill Corp. incurred a 100,000 net loss from disposal of a business segment. Also, on June 30, 2021, Mill paid 40,000 for property taxes assessed for the calendar year 2021. What amount of the foregoing items should be included in the determination of Mill’s net income or loss for the six-month interim period ended June 30, 2021? A. P120,000 B. P90,000 C. P140,000 D. P70,000
29. On June 30, 2021, Mill Corp. incurred a 100,000 net loss from disposal of a business segment. Also, on June 30, 2021, Mill paid 40,000 for property taxes assessed for the calendar year 2021. What amount of the foregoing items should be included in the determination of Mill’s net income or loss for the six-month interim period ended June 30, 2021? choices: P140,000 P120,000 P90,000 P70,000
32. MWF Company had the following transactions during the quarter ended March 31, 2021:• Loss on Sale- 900,000• Payment of fire insurance premium for calendar year 2021- 400,000• Payment of rent for 1 year- 1,200,000• Payment of property tax assessed for calendar year 2021- 500,000What total amount should be included in the determination of the net income or loss for the quarter ended March 31, 2021?
During 2020, a construction company changed from the completed-contract method to the percentage-of-completion method for accounting purposes but not for tax purposes. Gross profit figures under both methods for the past three years appear below: Completed-Contract Percentage-of-Completion2018 ₱ 475,000 ₱ 700,0002019 625,000 950,0002020 700,000 1,050,000Total ₱1,800,000 ₱2,700,000 Assuming an income tax rate of 40% for all years, the effect of this accounting change on prior periods should be reported by a credit ofa. ₱540,000 on the 2020 income statement.b. ₱330,000 on the 2020 income statement.c. ₱540,000 on the 2020 retained earnings statement.d. ₱330,000 on the 2020 retained earnings statement.