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
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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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Exercise 16-12 (Algo) Deferred tax asset; taxable income given; valuation allowance [LO16-4] At the end of 2023, Payne Industries had a deferred tax asset account with a balance of $115 million attributable to a temporary book- tax difference of $460 million in a liability for estimated expenses. At the end of 2024, the temporary difference is $352 million. Payne has no other temporary differences and no valuation allowance for the deferred tax asset. Taxable income for 2024 is $828 million and the tax rate is 25%. Required: 1. Prepare the journal entry(s) to record Payne's income taxes for 2024, assuming it is more likely than not that the deferred tax asset will be realized in full. 2. Prepare the journal entry(s) to record Payne's income taxes for 2024, assuming it is more likely than not that only one-fourth of the deferred tax asset ultimately will be realized. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entry(s) to…