Oriole Corporation purchased equipment very late in 2023. Based on generous capital cost allowance rates provided in the Income Tax Act, Oriole claimed CCA on its 2023 tax return but did not record any depreciation because the equipment was being tested. This temporary difference will reverse and cause taxable amounts of $29,200 in 2024, $39,300 in 2025, and $42,900 in 2026. Oriole's accounting income for 2023 is $240,800 and $202,800 in each of 2024 and 2025, and the tax rate for 2023, 2024 and 2025 is 30%. There are no deferred tax accounts at the beginning of 2023. Oriole Corporation was informed on December 31, 2024 that the enacted rate for 2025 and subsequent years is 25%. (a) Your answer is correct. Calculate the deferred tax balances at December 31, 2024 and 2025. Deferred tax liability (b) eTextbook and Media List of Accounts Taxable income 5 Income taxes payable $ Calculate taxable income and income tax payable for 2024 and 2025. 2024 2024 20550 S S 2025 2025 10725 Attempts: 2 of 5 used

Oriole Corporation purchased equipment very late in 2023. Based on generous capital cost allowance rates provided in the Income Tax Act, Oriole claimed CCA on its 2023 tax return but did not record any depreciation because the equipment was being tested. This temporary difference will reverse and cause taxable amounts of $29,200 in 2024, $39,300 in 2025, and $42,900 in 2026. Oriole's accounting income for 2023 is $240,800 and $202,800 in each of 2024 and 2025, and the tax rate for 2023, 2024 and 2025 is 30%. There are no deferred tax accounts at the beginning of 2023. Oriole Corporation was informed on December 31, 2024 that the enacted rate for 2025 and subsequent years is 25%. (a) Your answer is correct. Calculate the deferred tax balances at December 31, 2024 and 2025. Deferred tax liability (b) eTextbook and Media List of Accounts Taxable income 5 Income taxes payable $ Calculate taxable income and income tax payable for 2024 and 2025. 2024 2024 20550 S S 2025 2025 10725 Attempts: 2 of 5 used

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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Ivanhoe Corporation purchased equipment very late in 2023. Based on generous capital cost allowance rates provided in the Income Tax Act, Ivanhoe claimed CCA on its 2023 tax return but did not record any depreciation because the equipment was being tested. This temporary difference will reverse and cause taxable amounts of $26,200 in 2024, $38,600 in 2025, and $45,000 in 2026. Ivanhoe's accounting income for 2023 is $239,600 and the tax rate is 30% for all years. There are no deferred tax accounts at the beginning of 2023. Calculate the deferred tax balance at December 31, 2023. Deferred tax Calculate taxable income and income tax payable for 2023. Taxable income $ Income tax payable $
Novak Corporation purchased equipment very late in 2020. Based on generous capital cost allowance rates provided in the Income Tax Act, Novak Corporation claimed CCA on its 2020 tax return but did not record any depreciation because the equipment was being tested. This temporary difference will reverse and cause taxable amounts of $30,700 in 2021, $31,300 in 2022, and $45,000 in 2023. Novak’s accounting income for 2020 is $236,000 and $202,000 in each of 2021 and 2022, and the tax rate is 30%. There are no deferred tax accounts at the beginning of 2020. Novak Corporation was informed on December 31, 2021 that the enacted rate for 2022 and subsequent years is 25%. a) Calculate the deferred tax balances at December 31, 2021 and 2022. b) Calculate taxable income and income tax payable for 2021 and 2022. c) Prepare the income tax expense section of the income statement for 2021, beginning with the line “Income before income tax. d) Prepare the income tax expense section of the income…
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R corpaoration purchased equipment very late in 2026. Based on gernous capital cost allowance rate provided in the income tax act .R>Corporation claimed CCA on its 2026 tax return, but did not record anu deprecation as the equipment had not yet been put into use. This temporary difference will reverse and cause taxable amount of $30,00 In 2017, $36,000 in 2028, and $48,000 in 2029. R corporation accounting income for 2026 is $360,000 and the tax rate is 20% for all years. There are no future accounts at the beginning of 2026. Required A) calculate the future income tax balance at December 31, 2026. Is this future tax asset to a future tax liability Calculate taxable income and income taxes payable for 2026 Prepare appropriate journal entries to record income taxes for 2026 2. Assume that Corporation reports accounting income of $290,000 for 2027, and no other temporarily differences other than the one identified part 1 above: Calculate the future income tax balance at…
Zekany Corporation would have had identical income before taxes on both its income tax returns and income statements for the years 2021 through 2024 except for differences in depreciation on an operational asset. The asset cost $110,000 and is depreciated for income tax purposes in the following amounts: 2021$36,300 2022 48,400 2023 16,500 2024 8,800 The operational asset has a four-year life and no residual value. The straight-line method is used for financial reporting purposes. Income amounts before depreciation expense and income taxes for each of the four years were as follows: 2021 2022 2023 2024 Accounting income before taxes and depreciation $70,000 $90,000 $80,000 $80,000 Assume the income tax rate for 2021 and 2022 was 30%; however, during 2022, tax legislation was passed to raise the tax rate to 40% beginning in 2023. The 40% rate remained in effect through the years 2023 and 2024. Both the accounting and income tax periods end December 31. Required: Prepare the journal…
Zekany Corporation would have had identical income before taxes on both its income tax returns and income statements for the years 2021 through 2024 except for differences in depreciation on an operational asset. The asset cost $220,000 and is depreciated for income tax purposes in the following amounts: 2021 $ 72,600 2022 96,800 2023 33,000 2024 17,600 The operational asset has a four-year life and no residual value. The straight-line method is used for financial reporting purposes.Income amounts before depreciation expense and income taxes for each of the four years were as follows: 2021 2022 2023 2024 Accounting income before taxes and depreciation $120,000 140,000 130,000 130,000 Assume the income tax rate for 2021 and 2022 was 30%; however, during 2022, tax legislation was passed to raise the tax rate to 40% beginning in 2023. The 40% rate remained in effect through the years 2023 and 2024. Both the accounting and income tax…
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In 2025, Sandhill Company discovered an error while preparing its 2025 financial statements. A building constructed at the beginning of 2024 costing $1299900 has not been depreciated. The estimated useful life of the building is 30 years with no salvage value. Straight-line depreciation is used. Sandhill properly included depreciation on its tax return also using straight-line depreciation. Income tax payable was also reported correctly at a tax rate of 20%. Income before depreciation expense in 2025 was $400000. What was the impact on the following accounts at the start of 2025? Accumulated Depreciation was understated by $86660 and Retained Earnings was overstated by $34664. O Accumulated Depreciation was understated by $43330 and Retained Earnings was overstated by $34664. O Accumulated Depreciation was overstated by $43330 and net income was understated by $43330. O Accumulated Depreciation was understated by $43330 and net income was overstated by $43330.
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