Problem 16-135 At the end of the prior year, Doubtful Inc. had a deferred tax asset of $23,500,000 attributable to its only timing difference, a temporary difference of $57,000,0000 in a liability for estimated expenses. At that time, a valuation allowance of $4,630,000 was established. At the end of the current year, the temporary difference is $52,000,000, and Doubtful determines that the balance in the valuation account should now be $5,000,000. Taxable income is $15,700,000 and the tax rate is 40% for all years. Required: Prepare journal entries to record Doubtful's income tax expense for the current year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 2 > Record the income taxes. Note: Enter debits before credits. Transaction General Journal Debit Credit 1 Record entry Clear entry View general journal

Problem 16-135 At the end of the prior year, Doubtful Inc. had a deferred tax asset of $23,500,000 attributable to its only timing difference, a temporary difference of $57,000,0000 in a liability for estimated expenses. At that time, a valuation allowance of $4,630,000 was established. At the end of the current year, the temporary difference is $52,000,000, and Doubtful determines that the balance in the valuation account should now be $5,000,000. Taxable income is $15,700,000 and the tax rate is 40% for all years. Required: Prepare journal entries to record Doubtful's income tax expense for the current year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 2 > Record the income taxes. Note: Enter debits before credits. Transaction General Journal Debit Credit 1 Record entry Clear entry View general journal

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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Tax return preparers should be aware of which of the following? A) Taxpayers who have more than one Form W-2 B) Taxpayers without a state driver's license C) Taxpayers with more than two dependents D) Taxpayers with a non-standard or altered Form W-2
27. Analysis of the assets and liabilities of Iniwan Corp. on December 31, 2016 disclosed assets with a tax basis of P1,000,000 and a book basis of P1,300,000. There was no difference in the liability basis. The difference in the asset basis arose from temporary difference that would reverse in the following years: 2019- P72,000 2020- 40,000 The enacted tax rates are 30% for 2016- 2019 and 32% for the years 2020-2021. What is the total deferred tax 2021 - P38,000 2017- P80,000 2018 - 70,000 liability at December 31, 2016? А. Р90,000 В. Р91,560 C. P96,000 D. P99,000
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24. Horner Corporation has a deferred tax asset at December 31, 2015 of $80,000 due to the recognition of potential tax benefits of an operating loss carryforward. The enacted tax rates are as follows: 40% for 2012-2014; 35% for 2015; and 30% for 2016 and thereafter. Assuming that management expects that only 60% of the related benefits will actually be realized, a valuation account should be established in the amount of: a. $80,000 b. $32,000 c. $28,000 d. $24,000
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