Rowen, Inc. had pre-tax accounting income of $1,672,000 and a tax rate of 40% in 2015, its first year of operations. During 2015 the company had the following transactions:
Rowen, Inc. had pre-tax accounting income of $1,672,000 and a tax rate of 40% in 2015, its first year of operations. During 2015 the company had the following transactions:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
5

Transcribed Image Text:Use the following information for questions 5 and 6.
Rowen, Inc. had pre-tax accounting income of
$1,672,000 and a tax rate of 40% in 2015, its first year of
operations. During 2015 the company had the following
transactions:
Received rent from Jane, Co. for 2016
Municipal bond income
Depreciation for tax purposes in excess of book
depreciation
Installment sales revenue to be collected in 2016
5.
For 2015, what is the amount of income taxes
payable for Rowen, Inc?
a. $603,200
b. $654,400
$686,400
$772,800
C.
d.
$64,000
$80,000
$40,000
$108,000
6. At the end of 2015, which of the following deferred
tax accounts and balances is reported on Rowen,
Inc.'s balance sheet?
Account
Balance
Deferred tax asset
Deferred tax liability
Deferred tax asset
Deferred tax liability
a.
b.
C.
d.
$32,000
$32,000
$59,200
$59,200
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