Prepare the journal entries for years 2023-2026 to record income tax expense (benefit) and incometaxes payable (refundable), and the tax effects of the loss carryforward, assuming that based on theweight of available evidence, it is more likely than not that one-half of the benefits of the losscarryforward will not be realized. (List all debit entries before credit entries. Credit account titlesare automatically indented when amount is entered. Do not indent manually. If no entry isrequired, select "No Entry" for the account titles and enter O for the amounts. Record journalentries in the order presented in the problem.)Date Account Titles and Explanation2023202420252026I(To record income taxes.)(To record allowance.)(To record income taxes.)OkayTheDebit Oriole Inc. reports the following pretax income (loss) for both book and tax purposes.Year2023202420262025 (96,000)114,000PretaxIncome (Loss)$114,000(a)91,000Tax Rate202320%20%25%The tax rates listed were all enacted by the beginning of 2023.25%Prepare the journal entries for years 2023-2026 to record income tax expense (benefit) and income taxes payable (refundable),and the tax effects of the loss carryforward, assuming that based on the weight of available evidence, it is more likely than not thatone-half of the benefits of the loss carryforward will not be realized. (List all debit entries before credit entries. Credit accounttitles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "NoEntry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.)Date Account Titles and ExplanationDebitCredit

Tax liabilities incurred but not yet paid for any fiscal year are considered deferred tax…

Answered: Prepare the journal entries for years…

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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Which of the following statements concerning the classification of deferred tax assets and liabilities is true? Multiple Choice A deferred tax asset is classified as noncurrent only if the company expects the future tax benefit to be received more than 12 months from the balance sheet date. All deferred tax assets and liabilities are treated as noncurrent. A deferred tax asset related to a bad debt reserve is classified as current if the related accounts receivable is classified as a current asset. A deferred tax asset related to inventory capitalization is classified as noncurrent only if the company uses a FIFO accounting method and the inventory to which the deferred tax asset relates will not be treated as sold within 12 months from the balance sheet date.
Which of the following usually results in an increase in a deferred tax asset? A) Accelerated depreciation for tax reporting and straight-line depreciation for financial reporting. B) Prepaid insurance. C) Subscriptions delivered for which customers had paid in advance. D) None of these answer choices are correct.
A taxpayer must report the full amount of gambling winnings on Schedule 1, line 8. How are gambling losses reported? Select one: a. On Schedule 1, line 22 Ob. On Schedule A, line 16, limited to gambling winnings included on Schedule 1 OC. Subtracted from gambling winnings before reporting on Schedule 1, line 8 Od. On Form 1040, line Ba as an adjustment to income
A friend says to you, “I don’t understand how taxable temporary differences can be ‘liabilities’ and how deductible temporary differences can be ‘assets.’ It seems to me that these temporary differences relate only to the future and that accounting is based on ‘historical cost.’ In addition, the government frequently changes the tax laws, so no one knows what the future tax laws will be.” Required: Prepare a written response for your friend that explains why deferred tax assets and deferred tax liabilities are recognized and reported on a corporation’s balance sheet. Include a discussion of a valuation allowance.
Which of the following statements about extensions of time to file certain business income tax returns is true? a)It is required of mostentities to us e electronic funds transfer to make all federal tax deposits. b) The IRS will send taxpayers a notification if their request for an extension is approved. c) Property filing the form wil not automatically give taxpayers the maximum extension of time to file allowed. d) The maximum extension of the to file allowed from the due date of the taxpayer's business return is generally three months.
Performing Accounting Research When a company is uncertain as to the disposition of a tax position, it becomes a question as to the amount of tax benefit to recognize in the financial statements. Resolution of tax positions may take years. A company is trying to determine how to estimate the benefit to recognize related to an anticipated tax settlement with a taxing authority. What guidance is available in the Codification in reporting this information? FASB ASC 0 0 Check X x 0
Which of the following causes a temporary difference between taxable and pretax accounting income? A. Investment expenses incurred to generate tax-exempt income. B. MACRS used for depreciating equipment. C. The dividends received deduction. D. Life insurance proceeds received due to the death of an executive.
Under the direct charge-off method, when a specific account receivable is written off, what account is debited and what is the effect of the write-off on net income and on assets? debit Accounts Receivable; the write off decreases net income and total assets debit Allowance for Uncollectible Accounts; the write off increases net income and total assets debit Uncollectible Accounts Expense the write off decreases net income and total assets debit Uncollectible Accounts Expense; the write off increases net income and total assets A
The expense recognition a. requires that all credit losses be recorded when an individual customer cannot pay b. necessitates the recording of an estimated amount for bad debts. c. results in the recording of a known amount for bad debt losses. d. is not involved in the decision of when to expense a credit loss
For each of the following situations, indicate the amount of the penalty that could be imposed on the tax return preparer: a. A tax return preparer understates the taxpayer's tax liability with a frivolous position and does not disclose the position. The greater of $ percent of the income derived by the tax preparer for an undisclosed unrealistic position. or b. A tax return preparer fails to furnish his identifying number. c. A tax return preparer aids a taxpayer (an individual) in understating a tax liability. d. A tax return preparer endorses and cashes a client's tax refund check.
alculator Which of the following is not a preparer penalty? a.Tax preparers may be assessed a penalty for endorsing or cashing a refund check issued to a taxpayer. b.Tax preparers may be assessed a penalty for failing to give the taxpayer the preparer's workpapers. c.Tax preparers may be assessed a penalty for failing to keep a copy of the prepared return. d.Tax preparers may be assessed a penalty for failing to sign a tax return.
A company determines that it is more likely than not that a portion of a deferred tax asset will not be realized. Due to the value of the beginning of the period balance, this determination caused a valuation allowance account to decrease during the current period. This situation will cause Income Tax Expense to decrease. O True O False

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