Oriole Co. at the end of 2020, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income $3165000 Estimated litigation expense 4165000 Extra depreciation for taxes (6162000) Taxable income $   1168000 The estimated litigation expense of $4165000 will be deductible in 2021 when it is expected to be paid. Use of the depreciable assets will result in taxable amounts of $2054000 in each of the next 3 years. The income tax rate is 20% for all years. The deferred tax asset to be recognized is

Q: Lax Company at the end of 2019, its first year of operations, prepared a reconciliation between…

A: Hey, since there are multiple questions posted, we will answer first question. If you want any…

Q: Sherrod, Incorporated, reported pretax accounting income of $96 million for 2024. The following…

A: Tax liability and incomeThe amount of money paid by the government on the income or gains earned by…

Q: Pretax financial income $930000 Estimated litigation expense 2550000 Installment sales (2040000)…

A: Deferred tax liability means taxable amount is less then income as per financial income. And tax…

Q: In its 2021 income statement, Crane Corp. reported depreciation of $3600000 and interest revenue on…

A: Deferred tax liability is the amount of liability that arises on account of differences in items as…

Q: Ayres Services acquired an asset for $200 million in 2021. The asset is depreciated for financial…

A: Differed Tax Liability: It is created when there are temporary differences book tax and actual…

Q: At the end of 2020, Payne Industries had a deferred tax asset account with a balance of $25 million…

A: Given information is: At the end of 2020, Payne Industries had a deferred tax asset account with a…

Q: Ayres Services acquired an asset for $48 million in 2024. The asset is depreciated for financial…

A: Deferred Tax Liability -Taxes that become due in one accounting period but are not paid in that…

Q: Required: Determine (a) the temporary book-tax difference for the depreciable asset and (b) the…

A: Deferred Tax Liability ;-A deferred tax liability refers to an accounting concept that arises due to…

Q: The following information is taken from Brilliant Company’s 2020 financial records: Pretax…

A: Solution: Deferred tax asset = Excess accrued warranty * tax rate of 2021  = 24500*32%  = 7,840

Q: pretax accounting income

A: Pretax accounting income = Taxable income + Accumulated depreciation for tax purpose - Accumulated…

Q: At the beginning of 2021, Crane Co. purchased an asset for $1200000 with an estimated useful life of…

A: The correct answer is  $978000$720000

Q: Sunland Co. at the end of 2020, its first year of operations, prepared a reconciliation between…

A: Particulars Amount Income tax payable ($2040000x20%) $408,000 Less: Change in deferred tax asset…

Q: On January 1, 2021, Sheridan, Inc. purchased a machine for $2180000 which will be depreciated…

A: Solution Concept If in case due to temporary difference The income for tax reporting is less than…

Q: Ayres Services acquired an asset for $64 million in 2021. The asset is depreciated for financial…

A: Deferred tax liability  is created when a tax obligation is accumulated in one financial year but…

Q: Prepare Wilcox’s income tax journal entry at the end of 2019. 2. Prepare the lower portion of…

A: ANSWER : Tax payable = 2950 * 30% = 885 Tax expense = 3000 * 30% = 900 1) Journal entry: Dr…

Q: KL Corporation prepared the following reconciliation for its first year of operations: ·      Pretax…

A: Solution: Taxable income = Pretax financial income - Tax exempt interest - Taxable temporary…

Q: Current Attempt in Progress At the beginning of 2020, Sandhill Construction Company changed from the…

A: The profit-sharing plan refers to the type of retirement plan which helps an employee to be a part…

Q: For the year ended December 31, 2021, White Company reported pretax financial income of P5,000,000,…

A: Deferred tax: It implies to an estimate that is accounted or recorded on the balance sheet of the…

Q: Caramel Co. at the end of 2022, its first year of operations, prepared a reconciliation between…

A: when there is taxable temporary difference arise between accounting profit and tax profit then…

Q: During 2022 and 2023, Faulkner Manufacturing used the sum-of-the-years' - digits (SYD) method of…

A: Depreciation is used to record expenses of fixed assets over the life of the asset. It can be…

Q: At the beginning of 2018, FECC Corporation had discovered that the depreciation expense in the years…

A: Depreciation expense refers to the depreciation amount, that is, the amount of cost of assets that…

Q: KreamyKeyk Company, in its first year of operations, has the following difference between the…

A: 1. Deferred tax liability to be reported in KreamyKeyk's statement of financial position at December…

Q: At the end of 2020, Payne Industries had a deferred tax asset account with a balance of $65 million…

A: Introduction: Journal entries should not be used to record routine transactions such as customer…

Q: Ayres Services acquired an asset for $80 million in 2024. The asset is depreciated for financial…

A: When a tax obligation is accrued in one fiscal year but becomes payable in a later year, a deferred…

Q: ole Co. at the end of 2018, its first year of operations, prepared a reconciliation between pretax…

A: Depreciation:- Depreciation is defined as decrease in the monetary value of an asset over time due…

Q: Kyle, a single taxpayer, worked as a freelance software engineer for the first three months of 2022.…

A: Income from Self Employment = $60,000 Income from Full Time Employment = $202,000 As a freelance…

Q: Easton Co. at the end of 2020, its first year of operations, prepared a reconciliation between…

A: Income Tax: - Income Tax is the direct tax charged by the government on the income earned by the…

Q: Sandhill Corp. follows IFRS and began operations in 2023 and reported accounting income of $273,000…

A: Deferred tax asset: The deferred tax asset is created when the taxes to be paid as per income tax…

Q: At December 31, 2020, Novak Company had a net deferred tax liability of $445,000. An explanation of…

A: Temporary Differences      (Asset) Liability Classification Depreciation    188000 Non Current…

Q: Mathis Co. at the end of 2014, its first year of operations, prepared a reconciliation between…

A: Estimated litigation expense deductible in 2016 is a temporary difference. Hence, deferred tax…

Q: Acme Company uses an accelerated depreciation method for income tax purposes and the straight-line…

A: Deferred taxes result from timing discrepancies between when revenues, costs, profits, or losses are…

Q: The following information is available for Wenger Corporation for 2019 (its first year of…

A: aCompute taxable income for 2019.

Q: At the end of 2020, Payne Industries had a deferred tax asset account with a balance of $120 million…

A: A journal entry is utilized to record a business deal in a company's accounting records. A journal…

Q: At the end of 2020, its first year of operations, Tyre Recycling Inc. prepared the following…

A: GAAP income is used to determine income tax expense, which is a financial accounting record. The…

Q: Mathis Co. at the end of 2014, its first year of operations, prepared a reconciliation between…

A: Gross profit from Instalment sales of $800,000 will be realized in next year is a temporary…

Q: Oriole Co. at the end of 2021, its first year of operations, prepared a reconciliation between…

A: Deferred tax assets and deferred tax liabilities are two types of temporary differences that arise…

Q: In 2025, Sheridan Company accrued, for financial statement reporting, estimated losses on disposal…

A: A company's financial statements will appropriately represent its future tax payments or gains…

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.