Current Attempt in ProgressOperating income and tax rates for B.J. Company's first three years of operations were as follows:IncomeEnacted tax rate2024$50000025%2025($1100000)20%2026$178000030%Assuming that B.J. Company opts only to carryforward its 2025 NOL, what is the amount of deferred tax asset or liability that B.J.Company would report on its December 31, 2025 balance sheet?Deferred tax assetAmountor liability$220000Deferred tax asset$220000Deferred taxliability$275000Deferred taxliability$330000Deferred tax asset

Deferred Tax:A deferred tax adjustment is prevalent where there is a temporary difference in the…

Answered: Operating income and tax rates for B.J.…

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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1
During 2020, Sheffield Co.'s first year of operations, the company reports pretax financial income at $252,300. Sheffield's enacted tax rate is 45% for 2020 and 20% for all later years. Sheffield expects to have taxable income in each of the next 5 years. The effects on future tax returns of temporary differences existing at December 31, 2020, are summarized as follows. Future Years 2021 2022 2023 2024 2025 Total Future taxable (deductible) amounts: Installment sales Depreciation Unearned rent $31,300 5,800 (48,500) (48,500) $31,300 $31,300 5,800 $5,800 $5,800 $93,900 29,000 (97,000) 5,800 Complete the schedule below to compute deferred taxes at December 31, 2020. (Negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Deferred Tax Future Taxable Temporary Difference (Deductible) Amounts Tax Rate (Asset) Liability $ Installment sales $93,900 1% Depreciation 29,000 1% Unearned rent (97,000) % Totals THA
Wynn Farms reported a net operating loss of $160,000 for financial reporting and tax purposes in 2024. The enacted tax rate is 25%. Taxable income, tax rates, and income taxes paid in Wynn’s first four years of operation were as follows: Taxable Income Tax Rates Income Taxes Paid 2020 $ 75,000 20% $ 15,000 2021 85,000 20 17,000 2022 140,000 25 35,000 2023 75,000 40 30,000 Required: Prepare the journal entry to recognize the income tax benefit of the net operating loss. NOL carrybacks are not allowed for most companies, except for property and casualty insurance companies as well as some farm-related businesses. Assume Wynn is one of those businesses. Show the lower portion of the 2024 income statement that reports the income tax benefit of the net operating loss.
Greene Co. has pretax book income for the year ended December 31, 2022 in the amount of $315,000 and has a tax rate of 30%. Depreciation for tax purposes exceeded book depreciation by $10,500.What should Greene Co. record as its deferred tax liability for 2022? Group of answer choices $94,500 $0 $91,350 $3150
Current Attempt in Progress Wildhorse Inc. reports the following pre-tax incomes (losses) for both financial reporting purposes and tax purposes: Year 2021 2022 2023 2024 Accounting Income (Loss) $129,000 94,000 (302,000) 221,000 Tax Rate 25 % 25 % 30 % 30 % The tax rates listed were all enacted by the beginning of 2021. Wildhorse reports under the ASPE future income taxes method.
The pretax financial income (or loss) figures for Shamrock Company are as follows. 2017 81,000 2018 (51,000 ) 2019 (35,000 ) 2020 111,000 2021 95,000 Pretax financial income (or loss) and taxable income (loss) were the same for all years involved. Assume a 25% tax rate for 2017 and a 20% tax rate for the remaining years.Prepare the journal entries for the years 2017 to 2021 to record income tax expense and the effects of the net operating loss carryforwards. All income and losses relate to normal operations. (In recording the benefits of a loss carryforward, assume that no valuation account is deemed necessary.) (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 2017 enter an account title to record carryback enter a debit amount enter a…
In 2019, Beta had an annual effective tax rate of 20%. In the 2020 first quarter, the company would pay tax at 25% just for that quarter alone. Beta management estimates that the 2020 full year effective tax rate will be 15%. Based on a first quarter 2020 income before tax of $200,000 what amount of provision for income taxes should be accrued under the integral method. a. $50,000 b. $40,000 c. $60,000 d. $0 e. $30,000
The accounting income of Pharoah Corporation and its taxable income for the years 2023 to 2026 are as follows: Year Accounting Income Taxable Income Tax Rate 2023 $463,000 $302,000 25% 2024 425,000 301,000 30% 2025 401,000 309,000 30% 2026 465,000 651,000 30% The change in the tax rate from 25% to 30% was not enacted until early in 2024. Accounting income for each year includes an expense of $42,000 that will never be deductible for tax purposes. The remainder of the difference between accounting income and taxable income in each period is due to one reversing difference for the depreciation of property, plant, and equipment. No deferred taxes existed at the beginning of 2023. (a) Calculate the current and deferred tax expense or benefit for each of the four years. Also calculate the balance of the deferred tax balance sheet account at the end of each fiscal year from 2023 to 2026. (Show asset and benefit numbers as positive, and liability and expense numbers as negative.) 2023 2024…
The following information relating to the year ending 30 June 2023 for Penrith Ltd has been obtained from the company's records. Profit for year before further adjustments and tax Retained earnings (1 July 2022) General reserve Revaluation surplus Interim dividend paid Development costs Share Capital $33 000 5 500 3 000 increase the general reserve by $1000 2 500 5 000 4. provide for an estimated tax expense and current tax liability of $7500 on 2022-23 profita 3 500 100 000 On 30 June 2023, the directors decided to: 1. recommend a final cash dividend of $7000, to be ratified by shareholders at the Annual General Meeting to be paid on 15 August 2023. 2. write off development costs 3.
The pretax financial income of Tamarisk Company differs from its taxable income throughout each of 4 years as follows. Year PretaxFinancial Income Taxable Income Tax Rate 2020 $295,000 $180,000 35 % 2021 320,000 217,000 20 % 2022 335,000 264,000 20 % 2023 435,000 592,000 20 % Pretax financial income for each year includes a nondeductible expense of $29,300 (never deductible for tax purposes). The remainder of the difference between pretax financial income and taxable income in each period is due to one depreciation temporary difference. No deferred income taxes existed at the beginning of 2020. Prepare the Income stmt for 2021 beginning with income before income taxes
Skysong Corporation had the following tax information. Year Taxable Income Tax Rate Taxes Paid 2023 $276,000 35 % $96,600 2024 299,000 30 89,700 2025 368,000 30 110,400 In 2026, Skysong suffered a net operating loss of $441,600, which it elected to carryback. The 2026 enacted tax rate is 29%. Prepare Skysong's entry to record the effect of the loss carryback. (List debit entry before credit entry. 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 enter O for the amounts.) Account Titles and Explanation Debit Credit
During 2020, Marigold Co.’s first year of operations, the company reports pretax financial income at $247,300. Marigold’s enacted tax rate is 45% for 2020 and 20% for all later years. Marigold expects to have taxable income in each of the next 5 years. The effects on future tax returns of temporary differences existing at December 31, 2020, are summarized as follows. Future Years 2021 2022 2023 2024 2025 Total Future taxable (deductible) amounts: Installment sales $33,800 $33,800 $33,800 $101,400 Depreciation 5,800 5,800 5,800 $5,800 $5,800 29,000 Unearned rent (47,000) (47,000) (94,000) Complete the schedule below to compute deferred taxes at December 31, 2020. (Negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)…

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