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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The Dakota Corporation had a 2021 taxable income of $20,000,000 from operations after all operating costs but before (1) interest charges of $3,800,000, (2) dividends received of $320,000, (3) dividends paid of $2,200,000, and (4) income taxes (the firm’s tax rate is 21 percent).a. Calculate Dakota’s income tax liability. (Round your answer to the nearest dollar amount.) With a marginal and average tax rate of 21% The income tax liability is NOT 3,469,200
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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% In the journal entry at the end of the year that records income tax expense, deferred taxes and income taxes payable, what is the entry to the Income Tax Payable account? Question 19 options: a) credit Income Tax Payable account by $162,500 b) credit Income Tax Payable account by $300,000. c) credit to Income Tax Payable account by $25,000. d) credit Income Tax Payable account by $512,500.
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For the year ended 30 June, BBNT Pty Ltd, a lawn mower manufacturer, reported an operating (accounting) profit of $750,000. The company does not elect to be taxed as a SBE taxpayer. In coming to this profit figure, the financial accountant had taken into account the following items. Please explain the income tax implications for each of the items. You are NOT required to compute the amount of capital allowance. $30,000 has been claimed as a deduction being the amortisation of goodwill arising from the acquisition of a business two years earlier. A provision has been raised for future warranties equal to 2% of sales. During the year, the sales amounted to $5 million. Depreciation on the buildings was $50,000. However, for tax purposes, only $25,000 is tax deductible. The company spent $75,000 on legal expenses opposing an application by Heavy Mowers Pty Ltd to extend its patent on a brand of mower. If the patent was not extended, then BBNT could produce a similar mower. The company…
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.
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