Riverbed Inc. had accounting income of $152,000 in 2020. Included in the calculation of that amount is the CEO's life insurance expense of $5,800, which is not deductible for tax purposes. In addition, the undepreciated capital cost (UCC) for tax purposes is $13,700 lower than the net carrying amount of the property, plant, and equipment, although the amounts were equal at the beginning of the year. Prepare Riverbed's journal entry to record 2020 income tax. Assume a tax rate of 25% and that Riverbed uses the taxes payable method of accounting for income taxes under ASPE. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts) Year Account Titles and Explanation 2020 Debit Credit

Riverbed Inc. had accounting income of $152,000 in 2020. Included in the calculation of that amount is the CEO's life insurance expense of $5,800, which is not deductible for tax purposes. In addition, the undepreciated capital cost (UCC) for tax purposes is $13,700 lower than the net carrying amount of the property, plant, and equipment, although the amounts were equal at the beginning of the year. Prepare Riverbed's journal entry to record 2020 income tax. Assume a tax rate of 25% and that Riverbed uses the taxes payable method of accounting for income taxes under ASPE. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter O for the amounts) Year Account Titles and Explanation 2020 Debit Credit

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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During 2024, its first year of operations, Baginski Steel Corporation reported a net operating loss of $405,000 for financial reporting and tax purposes. During 2025, Baginski reported income of $225,000 for financial reporting and tax purposes. The enacted tax rate is 25%. Required: Prepare the journal entry to recognize Baginski’s 2025 tax expense or tax benefit. Show the lower portion of the 2025 income statement that reports income tax expense or benefit.
Grand Corporation reported pretax book income of $612,000. Tax depreciation exceeded book depreciation by $408,000. In addition, the company received $306,000 of tax-exempt municipal bond interest. The company's prior-year tax return showed taxable income of $51,000. Compute the company's current income tax expense or benefit. (Leave no answer blank. Enter N/A or zero.) 이 Current income tax Deferred income tax N/A expense $
At the end of 2020, Payne Industries had a deferred tax asset account with a balance of $125 million attributable to a temporary book-tax difference of $500 million in a liability for estimated expenses. At the end of 2021, the temporary difference is $384 million. Payne has no other temporary differences and no valuation allowance for the deferred tax asset. Taxable income for 2021 is $900 million and the tax rate is 25%. Required:1. Prepare the journal entry(s) to record Payne’s income taxes for 2021, assuming it is more likely than not that the deferred tax asset will be realized.2. Prepare the journal entry(s) to record Payne’s income taxes for 2021, assuming it is more likely than not that only one-fourth of the deferred tax asset ultimately will be realized.
At the end of 2020, Payne Industries had a deferred tax asset account with a balance of $100 million attributable to a temporary book- tax difference of $400 million in a liability for estimated expenses. At the end of 2021, the temporary difference is $304 million. Payne has no other temporary differences and no valuation allowance for the deferred tax asset. Taxable income for 2021 is $720 million and the tax rate is 25%. Required: 1. Prepare the journal entry(s) to record Payne's income taxes for 2021, 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 2021, 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 record Payne's income taxes for 2021, assuming it is more likely than not that the deferred…
Pronghorn Inc. incurred a net operating loss of $583,900 in 2023. Combined income for 2020, 2021, and 2022 was $464,400. The tax rate for all years is 30%. Assume that it is more likely than not that the entire tax loss carryforward will not be realized in future years. Assume that Pronghorn earns taxable income of $20,300 in 2024 and that at the end of 2024 there is still too much uncertainty to recognize a deferred tax asset. (a) Prepare the journal entries that are necessary at the end of 2024 assuming that Pronghorn does not use a valuation allowance account. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Year Account Titles and Explanation 2024 2024 (To record current tax expense) (To record current tax benefit) Debit Credit
Grand Corporation reported pretax book income of $675,000. Tax depreciation exceeded book depreciation by $450,000. In addition, the company received $337,500 of tax-exempt municipal bond Interest. The company's prior-year tax return showed taxable income of $56,250. Compute the company's current income tax expense or benefit. (Leave no answer blank. Enter N/A or zero.) Answer is complete but not entirely correct. S Current income tax Deferred income tax N/A expenses 153,563 94,500
During 2024, its first year of operations, Baginski Steel Corporation reported a net operating loss of $360,000 for financial reporting and tax purposes. During 2025, Baginski reported income of $200,000 for financial reporting and tax purposes. The enacted tax rate is 25%. Required: - Prepare the journal entry to recognize Baginski's 2025 tax expense or tax benefit. Show the lower portion of the 2025 income statement that reports income tax expense or benefit.
At the end of 2020, Payne Industries had a deferred tax asset account with a balance of $90 million attributable to a temporary book-tax difference of $360 million in a liability for estimated expenses. At the end of 2021, the temporary difference is $272 million. Payne has no other temporary differences. Taxable income for 2021 is $648 million and the tax rate is 25%. Payne has a valuation allowance of $36 million for the deferred tax asset at the beginning of 2021. Required: Prepare the journal entry(s) to record Payne’s income taxes for 2021, assuming it is more likely than not that the deferred tax asset will be realized in full. Prepare the journal entry(s) to record Payne’s income taxes for 2021, assuming it is more likely than not that only one-fourth of the deferred tax asset ultimately will be realized.
At the end of 2021, Schrutte Inc. in its first year of operations, had pretax financial income of $650,000. The company had extra depreciation taken for tax purposes in the amount of $975,000. Estimated expenses that were deducted for financial income but not yet paid amounted to $425,000. It is estimated that the expenses will be paid in 2022. The tax rate for all years is 25% Which of the following items are included in the journal entry at the end of the year? Question 13 options: a) credit deferred tax liability by $106,250. b) debit Income Tax Expense by $162,500 c) debit Deferred Tax Asset by 243,750. d) credit to Income Tax Payable account by $100,000.
At the end of 2022, its first year of operations, Zekany's reconciliation of pretax accounting income to taxable income is as follows: Pretax accounting income $ 210,000 Permanent difference (14,200 ) 195,800 Temporary difference-depreciation (19,100 ) Taxable income $ 176,700 Zekany's tax rate is 25%. No estimated taxes have been paid. What should Zekany report as income tax payable for 2022?
Wildhorse Company deducts insurance expense of $201000 for tax purposes in 2021, but the expense is not yet recognized for accounting purposes. In 2022, 2023, and 2024, no insurance expense will be deducted for tax purposes, but $67000 of insurance expense will be reported for accounting purposes in each of these years. Wildhorse Company has a tax rate of 20% and income taxes payable of $174000 at the end of 2021. There were no deferred taxes at the beginning of 2021.What is the amount of the deferred tax liability at the end of 2021?
Nolan Corporation had the following tax information. Year Taxable Income Tax Rate Taxes Paid 2018 300000 35 105000 2019 325000 30 97500 2020 400000 30 120000 In 2021, Nolan suffered a net operating loss of $480,000, which it elected to carryback. The 2021 enacted tax rate is 29%. Prepare Nolan’s entry to record the effect of the loss carryback.