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Problem 16-9 (Algo) Determine deferred tax assets and liabilities from book-tax differences; financial statement effects [LO16-2, 16-3] Corning-Howell reported taxable income in 2024 of $200 million. At December 31, 2024, the reported amount of some assets and liabilities in the financial statements differed from their tax bases as indicated below: Assets Current Net accounts receivable Prepaid insurance Prepaid advertising Noncurrent Investments in equity securities (fair value)* Buildings and equipment (net) Liabilities Current Deferred subscription revenue Long-term Liability-compensated future absences Gains and losses taxable when investments are sold. Carrying Amount Tax Basis $ 88 million $ 92 million 100 million 84 million 84 million 440 million 360 million 92 million 674 million The total deferred tax asset and deferred tax liability amounts at January 1, 2024, were $196.25 million and $25 million, respectively. The enacted tax rate is 25% each year. Required: 1. Determine the total deferred tax asset and deferred tax liability amounts at December 31, 2024. 2. Determine the increase (decrease) in the deferred tax asset and deferred tax liability accounts at December 31, 2024. 3. Determine the income tax payable currently for the year ended December 31, 2024. 3034

Problem 16-9 (Algo) Determine deferred tax assets and liabilities from book-tax differences; financial statement effects [LO16-2, 16-3] Corning-Howell reported taxable income in 2024 of $200 million. At December 31, 2024, the reported amount of some assets and liabilities in the financial statements differed from their tax bases as indicated below: Assets Current Net accounts receivable Prepaid insurance Prepaid advertising Noncurrent Investments in equity securities (fair value)* Buildings and equipment (net) Liabilities Current Deferred subscription revenue Long-term Liability-compensated future absences Gains and losses taxable when investments are sold. Carrying Amount Tax Basis $ 88 million $ 92 million 100 million 84 million 84 million 440 million 360 million 92 million 674 million The total deferred tax asset and deferred tax liability amounts at January 1, 2024, were $196.25 million and $25 million, respectively. The enacted tax rate is 25% each year. Required: 1. Determine the total deferred tax asset and deferred tax liability amounts at December 31, 2024. 2. Determine the increase (decrease) in the deferred tax asset and deferred tax liability accounts at December 31, 2024. 3. Determine the income tax payable currently for the year ended December 31, 2024. 3034

FINANCIAL ACCOUNTING
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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Problem 16-9 (Algo) Determine deferred tax assets and liabilities from book-tax differences; financial statement effects [LO16-2, 16-3] Corning-Howell reported taxable income in 2024 of $200 million. At December 31, 2024, the reported amount of some assets and liabilities in the financial statements differed from their tax bases as indicated below: Assets Current Net accounts receivable Prepaid insurance Prepaid advertising Noncurrent Investments in equity securities (fair value) * Buildings and equipment (net) Liabilities Current Deferred subscription revenue Long-term Liability-compensated future absences Gains and losses taxable when investments are sold. Carrying Amount Tax Basis $ 88 million $ 92 million 100 million 0 84 million 84 million 0 440 million 360 million 92 million 0 674 million 0 The total deferred tax asset and deferred tax liability amounts at January 1, 2024, were $196.25 million and $25 million, respectively. The enacted tax rate is 25% each year. Required: 1. Determine the total deferred tax asset and deferred tax liability amounts at December 31, 2024. 2. Determine the increase (decrease) in the deferred tax asset and deferred tax liability accounts at December 31, 2024. 3. Determine the income tax payable currently for the year ended December 31, 2024. 4. Prepare the journal entry to record income taxes for 2024.
Transcribed Image Text:Problem 16-9 (Algo) Determine deferred tax assets and liabilities from book-tax differences; financial statement effects [LO16-2, 16-3] Corning-Howell reported taxable income in 2024 of $200 million. At December 31, 2024, the reported amount of some assets and liabilities in the financial statements differed from their tax bases as indicated below: Assets Current Net accounts receivable Prepaid insurance Prepaid advertising Noncurrent Investments in equity securities (fair value) * Buildings and equipment (net) Liabilities Current Deferred subscription revenue Long-term Liability-compensated future absences Gains and losses taxable when investments are sold. Carrying Amount Tax Basis $ 88 million $ 92 million 100 million 0 84 million 84 million 0 440 million 360 million 92 million 0 674 million 0 The total deferred tax asset and deferred tax liability amounts at January 1, 2024, were $196.25 million and $25 million, respectively. The enacted tax rate is 25% each year. Required: 1. Determine the total deferred tax asset and deferred tax liability amounts at December 31, 2024. 2. Determine the increase (decrease) in the deferred tax asset and deferred tax liability accounts at December 31, 2024. 3. Determine the income tax payable currently for the year ended December 31, 2024. 4. Prepare the journal entry to record income taxes for 2024.
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