Pharoah Co. at the end of 2017, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income Estimated litigation expense Extra depreciation for taxes Taxable income $ 35,50,000 40,55,000 (60,00,000) $ 16,05,000 The estimated litigation expense of $4055000 will be deductible in 2018 when it is expected to be paid. Use of the depreciable assets will result in taxable amounts of $2000000 in each of the next 3 years. The income tax rate is 40% for all years. Income taxes payable is

Pharoah Co. at the end of 2017, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income Estimated litigation expense Extra depreciation for taxes Taxable income $ 35,50,000 40,55,000 (60,00,000) $ 16,05,000 The estimated litigation expense of $4055000 will be deductible in 2018 when it is expected to be paid. Use of the depreciable assets will result in taxable amounts of $2000000 in each of the next 3 years. The income tax rate is 40% for all years. Income taxes payable is

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 9MC: Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and...

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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)
33. At the end of 2017, its first year of operations, Staccato Company prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income Estimated litigation expenses Excess depreciation for taxes Taxable income 4,500,000 6,000,000 (9,000,000) 1,500,000 The estimated litigation expense of P6,000,000 will be deductible in 2018 when it is expected to be paid. Use of the depreciable assets will result in taxable amounts of P3,000,000 in each of the next three years. The income tax rate is 30% for all years. Assuming no payment yet at the end of 2017? been paid for income taxes, what is the income tax payable a. shate b. 450,000 900,000 1,350,000 с. d. 34. Refer to previous problem, what is the amount of deferred tax asset recorded at December 31, 2017? а. 450,000
Pole Co. at the end of 2018, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Use of the depreciable assets will result in taxable amounts of €350,000 in each of the next three years. The estimated litigation expenses of €840,000 will be deductible in 2021 when settlement is expected. Instructions a) Prepare the journal entry to record income tax expense, deferred taxes, and income taxes payable for 2018, assuming a tax rate of 40% for all years
Mathis Co. at the end of 2014, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income $ 800,000 Estimated litigation expense 2,000,000 Installment sales (1,600,00) Taxable income $ 1,200,000 The estimated litigation expense of $2,000,000 will be deductible in 2016 when it is expected to be paid. The gross profit from the installment sales will be realized in the amount of $800,000 in each of the next two years. The estimated liability for litigation is classified as noncurrent and the installment accounts receivable are classified as $800,000 current and $800,000 noncurrent. The income tax rate is 40% for all years. 3. The deferred tax liability - current to be recognized is a. $240,000 b. $480,000 c. $320,000 4. $640,000
Mathis Co. at the end of 2014, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income $ 800,000 Estimated litigation expense 2,000,000 Installment sales (1,600,000) Taxable income $ 1,200,000 The estimated litigation expense of $2,000,000 will be deductible in 2016 when it is expected to be paid. The gross profit from the installment sales will be realized in the amount of $800,000 in each of the next two years. The estimated liability for litigation is classified as noncurrent and the installment accounts receivable are classified as $800,000 current and $800,000 noncurrent. The income tax rate is 40% for all years. 2. The deferred tax asset to be recognized is a. $240,000 current b. $240,000 noncurrent c. $800,000 current d. $800,000 noncurrent
Mathis Co. at the end of 2014, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income $ 800,000 Estimated litigation expense 2,000,000 Installment sales (1,600,000) Taxable income $ 1,200,000 The estimated litigation expense of $2,000,000 will be deductible in 2016 when it is expected to be paid. The gross profit from the installment sales will be realized in the amount of $800,000 in each of the next two years. The estimated liability for litigation is classified as noncurrent and the installment accounts receivable are classified as $800,000 current and $800,000 noncurrent. The income tax rate is 40% for all years. 1. The income tax expense is a. $240,000. b. $320,000 c. $360,000. d. $400,000
XYZ Co. at the end of 2018, its first year of operations, prepared a reconciliation betweenpretax financial income and taxable income as follows:Pretax financial income € 750,000Estimated expenses deductible for taxes when paid 1,200,000Extra depreciation (1,350,000)Taxable income € 600,000Estimated warranty expense of €800,000 will be deductible in 2019, €300,000 in 2020, and€100,000 in 2021. The use of the depreciable assets will result in taxable amounts of €450,000in each of the next three years.Instructions(a) Prepare a table of future taxable and deductible amounts.(b) Prepare the journal entry to record income tax expense, deferred income taxes, andincome taxes payable for 2018, assuming an income tax rate of 40% for all years.
Use the following information for questions 18 and 19. Hopkins Co. at the end of 2010, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income $ 750,000 Estimated litigation expense 1,000,000 Extra depreciation for taxes (1,500,000) Taxable income $ 250,000 The estimated litigation expense of $1,000,000 will be deductible in 2011 when it is expected to be paid. Use of the depreciable assets will result in taxable amounts of $500,000 in each of the next three years. The income tax rate is 30% for all years. Income tax payable is Select one: a. $150,000. b. $0. c. $225,000. O d. $75,000.
Pole Co. at the end of 2018, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Use of the depreciable assets will result in taxable amounts of €350,000 in each of the next three years. The estimated litigation expenses of €840,000 will be deductible in 2021 when settlement is expected. Instructions a. Prepare a schedule of future taxable and deductible amounts
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
Sunland 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 $3330000 Estimated litigation expense 4330000 Extra depreciation for taxes (6324000) Taxable income $   1336000 The estimated litigation expense of $4330000 will be deductible in 2021 when it is expected to be paid. Use of the depreciable assets will result in taxable amounts of $2108000 in each of the next 3 years. The income tax rate is 20% for all years.Income taxes payable is $598800 $398800 0 $267200 I believe it is $267,200 but that answer seems to easy to be right
Sheridan 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 $2615000 Estimated litigation expense 3615000 Extra depreciation for taxes (5622000) Taxable income $   608000 The estimated litigation expense of $3615000 will be deductible in 2021 when it is expected to be paid. Use of the depreciable assets will result in taxable amounts of $1874000 in each of the next 3 years. The income tax rate is 20% for all years.Income taxes payable is $121600. $401400. $601400. $0.