Nash, Inc., changed from the LIFO cost flow assumption to the FIFO cost flow assumption in 2025. The increase in the prior year'sincome before taxes is $1,070,000. The tax rate is 20%.Prepare Nash's 2025 journal entry to record the change in accounting principle. (Credit account titles are automatically indented when theamount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List alldebit entries before credit entries.)Account Titles and ExplanationDebitCredit

Step 1: Determine the Cumulative EffectIncrease in income before taxes: $1,070,000Tax rate: 20%Tax…

Answered: Nash, Inc., changed from the LIFO cost…

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter16: Accounting Periods And Methods

Section: Chapter Questions

Problem 22CE

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Bonita, Inc., changed from the LIFO cost flow assumption to the FIFO cost flow assumption in 2025. The increase in the prior year's income before taxes is $1,300,500. The tax rate is 20%. Prepare Bonita's 2025 journal entry to record the change in accounting principle. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation eTextbook and Media Debit Credit
Shannon, Inc., changed from the LIFO cost flow assumption to the FIFO cost flow assumption in 2025. The increase in the prior year's income before taxes is $1,200,000. The tax rate is 20%. Prepare Shannon's 2025 journal entry to record the change in accounting principle. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Debit Credit
Sandhill, Inc., changed from the LIFO cost flow assumption to the FIFO cost flow assumption in 2020. The increase in the prior year's income before taxes is $1,127,000. The tax rate is 20%. Prepare Sandhill's 2020 journal entry to record the change in accounting principle. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit
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ALSO: Prepare the journal entry to record income taxes payable, deferred taxes, and income tax expense for 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
In 2023, Windsor Ltd., which follows IFRS, reported accounting income of $1,130,000 and the 2023 tax rate was 20%. Windsor had two timing differences for tax purposes: CCA on the company's tax return was $512,000. Depreciation expense on the financial statements was $308,000. These amounts relate to assets that were acquired on January 1, 2023, for $2,048,000. Accrued warranty expense for financial statement purposes was $140,600 (accrued expenses are not deductible for tax purposes). This is the first year Windsor offers warranties. Both of these timing differences are expected to fully reverse over the next four years, as follows: Year 2024 2025 2026 2027 Depreciation Difference $70,500 57,500 40,500 35,500 Warranty Expense Rate $20,500 20% 29,900 20% 39,600 18% 50,600 18% $204,000 $140,600
Skysong Corp. sold an investment on an installment basis. The total gain of $74,400 was reported for financial reporting purposes in the period of sale. The company qualifies to use the installment-sales method for tax purposes. The installment period is 3 years; one-third of the sale price is collected in the period of sale. The tax rate was 40% in 2020, and 20% in 2021 and 2022. The 20% tax rate was not enacted in law until 2021. The accounting and tax data for the 3 years is shown below. Financial Accounting Tax Return 2020 (40% tax rate). Income before temporary difference $86,800 $86,800 Temporary difference 74,400 24,800 Income $161,200 $111,600 2021 (20% tax rate) Income before temporary difference $86,800 $86,800 Temporary difference 24,800 Income $86,800 $111,600 2022 (20% tax rate). Income before temporary difference $86,800 $86,800 Temporary difference 24,800 Income $86,800 $111,600 Calculate cumulative temporary differences for years 2020-2022. (Negative amounts using…
(b) Prepare the general journal entries, if any, the accountant should make at December 31, 2023. Factor in tax effects. The company has a 25% tax rate for 2019 to 2023. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round the rate of deprecition under double decling balance method to 5 decimal places, ie. 13.33333%. Round answers to O decimal places, e.g. 5,125.) Date Account Titles and Explanation Dec. 31, 2023 Dec. 31, 2023 (To correct for the omission of depreciation expense in 2020) Dec. 31, 2023 (To adjust for change in depreciation method) (To record adjusting entry for depreciation) Save for Later Debit Credit Attempts: 0 of 1 used Submit Answer
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Blue Corporation borrowed $62,000 on November 1, 2025, by signing a $63,395, 3-month, zero-interest-bearing note. Prepare Blue's November 1, 2025, entry; the December 31, 2025, annual adjusting entry; and the February 1, 2026, entry. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) Date Account Titles and Explanation Debit Credit
Blossom Industries received its 2024 annual property tax bill for $21,300 on May 1. The taxes covered the period January-December, were payable by June 30 and were paid on that date. Blossom has a December 31 fiscal year end and makes annual adjusting entries. (a) Prepare the journal entry to record the receipt of the property tax bill on May 1. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Date Account Titles and Explanation Debit Credit May 1
Sarasota Company borrowed $34,800 on November 1, 2025, by signing a $34,800, 9%, 3-month note. Prepare Sarasota's November 1, 2025, entry; the December 31, 2025, annual adjusting entry; and the February 1, 2026, entry. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) Date Account Titles and Explanation Debit Credit

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