Recording Income Tax Expense (FSET) Procter & Gamble, Inc. reports the following tax information in its 2020 financial report. Year Ended June 30 Current Federal and state Foreign Total Deferred Federal and state Foreign Total 2018 2019 2020 $4,262 $1.280 $1.589 1.154 1.284 1.804 5416 2564 3393 (2029) (302) 40 148 (117) (648) (1.881) (419) (608) Provisions for income taxes $3.535 $2.145 $2.785 a. Record P&G's provision for income taxes for 2020 using the financial statement effects template. b. Explain how the provision for income affects P&G's financial statements. Note: Use negative signs with your answers, when appropriate. ■Note: Select "N/A" as your answer if a part of the accounting equation is not affected. Transaction To record income tax expense b. Asset + Noncash Assets Balance Sheet Contra Assets Liabilities Contributed Capital Earned Capital Contra Equity ° Income Statement Revenue. Expenses Net Income billion. (Note that if the company paid all or some of this amount in cash, then the correct entry would be to reduce cash rather than increase a payable) The company also has a deferred tax benefit which P&G has a current tax liability which approximates (ignoring some possible other accruals) the cash tax due for the year. The current tax liability is $ deferred tax liabilities we do not have the disclosure detail to discern). This deferred tax benefit in 2020 is $ deferred tax assets (or million.
Recording Income Tax Expense (FSET) Procter & Gamble, Inc. reports the following tax information in its 2020 financial report. Year Ended June 30 Current Federal and state Foreign Total Deferred Federal and state Foreign Total 2018 2019 2020 $4,262 $1.280 $1.589 1.154 1.284 1.804 5416 2564 3393 (2029) (302) 40 148 (117) (648) (1.881) (419) (608) Provisions for income taxes $3.535 $2.145 $2.785 a. Record P&G's provision for income taxes for 2020 using the financial statement effects template. b. Explain how the provision for income affects P&G's financial statements. Note: Use negative signs with your answers, when appropriate. ■Note: Select "N/A" as your answer if a part of the accounting equation is not affected. Transaction To record income tax expense b. Asset + Noncash Assets Balance Sheet Contra Assets Liabilities Contributed Capital Earned Capital Contra Equity ° Income Statement Revenue. Expenses Net Income billion. (Note that if the company paid all or some of this amount in cash, then the correct entry would be to reduce cash rather than increase a payable) The company also has a deferred tax benefit which P&G has a current tax liability which approximates (ignoring some possible other accruals) the cash tax due for the year. The current tax liability is $ deferred tax liabilities we do not have the disclosure detail to discern). This deferred tax benefit in 2020 is $ deferred tax assets (or million.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Recording Income Tax Expense (FSET)
Procter & Gamble, Inc. reports the following tax information in its 2020 financial report.
Year Ended June 30
Current
Federal and state
Foreign
Total
Deferred
Federal and state
Foreign
Total
2018 2019 2020
$4,262 $1.280 $1.589
1.154 1.284 1.804
5416 2564 3393
(2029) (302) 40
148 (117) (648)
(1.881) (419) (608)
Provisions for income taxes $3.535 $2.145 $2.785
a. Record P&G's provision for income taxes for 2020 using the financial statement effects template.
b. Explain how the provision for income affects P&G's financial statements.
Note: Use negative signs with your answers, when appropriate.
■Note: Select "N/A" as your answer if a part of the accounting equation is not affected.
Transaction
To record income tax expense
b.
Asset +
Noncash
Assets
Balance Sheet
Contra
Assets
Liabilities
Contributed
Capital
Earned
Capital
Contra
Equity
°
Income Statement
Revenue.
Expenses
Net
Income
billion. (Note that if the company paid all or some of this amount in cash, then the correct entry would be to reduce cash rather than increase a payable) The company also has a deferred tax benefit which
P&G has a current tax liability which approximates (ignoring some possible other accruals) the cash tax due for the year. The current tax liability is $
deferred tax liabilities we do not have the disclosure detail to discern). This deferred tax benefit in 2020 is $
deferred tax assets (or
million.
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