Question 1At 30 hune 2019, Beta Ltd had the following deferred tax balances:Deferred tan labilityDeferred tax assetSI8,00015,000Beta Ltd recorded a profit before tax of S80,000 for the year to 30 June 2020, which included thefollowing items:Depreciation expense -plant $7,000Doubtful debts expenseLong service leave expense 4,0003,000For taxation purposes the following amounts are allowable deductions for the year to 30 June 2020:Tax depreciation - plantBad debts written offS80002,000Depreciation rates for taation purposes are higher than for accounting purposes. A corporate tau rateof 3ON applies.Required:a) Determine the taable income and income tax payable for the year to 30 June 2020.b) Determine by what amount the balances of the deferred liability and deferred tax asset willincrease or decrease for the year to 30 June 2020 because of depreciation, doubtful debts andlong service leave) Prepare the necessary journal entries to account for income ta assuming recognition criteria aresatisfiedd) What are the balances of the deferred tax lability and deferred tax asset at 30 une 20207

Comment- Multiple Questions Asked. Deferred Tax Assets - It represents the increase in taxes…

Answered: Question 1 At 30 hune 2019, Beta Ltd…

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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Save & Exit Subm Two independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences: SITUATION Taxable income Amounts at year-end: Future deductible amounts 2. $46,000 $86,000 5,600 10,600 0 5,600 Future taxable amounts Balances at beginning of year, dr (cr): Deferred tax asset, Deferred tax liability $ 1,000 $ 3,180 0 1,000 The enacted tax rate is 30% for both situations. Required: For each situation determine the: SITUATION 2. (a.) Income tax payable currently. (b.) Deferred tax asset - balance at year-end. (c.) Deferred tax asset change dr or (cr) for the year. (d.) Deferred tax liability - balance at year-end. (e.) Deferred tax liability change dr or (cr) for the year. (f.) Income tax expense for the year. Next > 31 of 39
Wildhorse Company has the following two temporary differences between its income tax expense and income taxes payable. 2025 2026 2027 Pretax financial income $820,000 $927,000 $912,000 Excess depreciation expense on tax return (28,700) (42,000) (9,700) Excess warranty expense in financial income Taxable income 20,100 10,400 7,800 $811,400 $895,400 $910,100 The income tax rate for all years is 20%. (a) Your answer is partially correct. Assuming there were no temporary differences prior to 2025, prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2025, 2026, and 2027. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.)
1
A company reports the following pretax income (loss) for both financial reporting purposes and tax purposes. Year Pretax Income (Loss) Tax Rate 2018 $138,000 18% 2019 81,000 18 2020 (258,700) 21 2021 303,200 21 Assuming that the company can carryforward its 2020 net operating loss, what is the amount of deferred tax asset the company would report at the end of 2020 related to this loss carryforward?
Balance Sheet Presentation Thiel Company reports the following deferred tax items at the end of 2019: Deferred TaxItem # AccountBalance Related Asset or LiabilityCreating the Deferred Tax Item 1 $6,700 debit Current asset 2 7,200 credit Current liability 3 10,600 debit Noncurrent asset 4 15,500 credit Noncurrent liability Required: Show how the preceding deferred tax items are reported on Thiel's December 31, 2019, balance sheet. THIEL COMPANYBalance Sheet (Tax Items)December 31, 2019 Noncurrent Liabilities Deferred Tax asset or liability $
Amount in excess of P490,000.00 taxable income is to be multiplied to_______to compute for the graduated tax due a. 30% b. 32% c. 35%
vi.8
Buffalo Company has the following two temporary differences between its income tax expense and income taxes payable. 2020 2021 2022 Pretax financial income $811,000 $932,000 $992,000 Excess depreciation expense on tax return (31,500 ) (39,100 ) (9,900 ) Excess warranty expense in financial income 19,900 9,800 8,300 Taxable income $799,400 $902,700 $990,400 The income tax rate for all years is 20%. (a) Your Answer Correct Answer (Used) Assuming there were no temporary differences prior to 2020, prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020, 2021, and 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit…
Q1. Taxable income and applicable tax rates for C.J. Company’s first four years are shown below. For each year, taxable income and pretax financial income are identical. In the table below, taxable income is before any consideration of NOL carryback and carryforward. The enacted tax rates were known at 1/1/2018. Taxable Income Enacted tax rate 2018 $200 20% 2019 ($300) 15% 2020 $340 25% 2021 $210 25% Now assume that C.J. opted to carryback its 2019 NOL and carryforward any unused NOL to future years. Complete the table below for 2018 through 2021 to show the amount of income tax payable to the IRS or the refund due from the IRS for each year. Put your answer in the table below. Show tax payable as a positive number and tax refund as a negative number. Year Tax…
vi.2
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