s) In 2022, Demeter, Inc. reported depreciation expense of $1,279,000 and depreciation for tax purposes of $1,534,800. This was the only temporary difference between GAAP and tax and it will reverse equally over the next three years. Assume that the enacted income tax rates are 25% for 2022, 25% for 2023 and 30% for 2024 and 2025. What will Demeter, Inc. report as a deferred tax liability on its 2022 balance sheet? ( 5) O $63,950 O $51,160 O $72,477 O $76,740

s) In 2022, Demeter, Inc. reported depreciation expense of $1,279,000 and depreciation for tax purposes of $1,534,800. This was the only temporary difference between GAAP and tax and it will reverse equally over the next three years. Assume that the enacted income tax rates are 25% for 2022, 25% for 2023 and 30% for 2024 and 2025. What will Demeter, Inc. report as a deferred tax liability on its 2022 balance sheet? ( 5) O $63,950 O $51,160 O $72,477 O $76,740

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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100 Willobee Co. reported book income of $21,399,000 for 2023. This number included $1,284,000 of income from exempt municipal bonds. For tax purposes, the company reported $4,622,000 less in depreciation than that reported for GAAP purposes. The company also made tax payments of $3,210,000 during the year. If Willobee Co.'s 2023 tax rate was 30%, what will they report as deferred taxes on their 2023 balance sheet? ( 3) $1,386,600 deferred tax liability $1,771,800 deferred tax liability O $1,771,800 deferred tax asset $1,386,600 deferred tax asset
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15. ABC began operating on January 1, 2020. At the end of the first year of operation, ABC reported P7,000,000 income before income tax on its statement of financial performance and P2,500,000 taxable income on its tax return. Analysis of the P4,500,000 revealed that P3,500,000 was a difference without future tax consequence, and the other P1,000,000 was a temporary difference related to prepaid rent which is expected to reverse in 2022. At the end of 2021, the accumulated temporary tax liability difference related to future years is P1, 500,000. The P500,000 increase is due to an accrued income taxable only when actual collection is made, which is expected on the year 2022. The current and enacted future tax rate is 30%. Assume that the income before tax in 2021 and 2022 are P6,500,000 and P7,200,000, respectively. There is no permanent difference during these years. Following the rules applicable in accounting for deferred taxes, compute the deferred tax liability as of the end of…
ABC Corporation prepared the following reconciliation for its first year of operations:· Pretax financial income for 2020- P1,200,000· Tax exempt interest- P100,000· Taxable temporary difference - P300,000The temporary difference will reverse evenly over the next two years at an enacted tax rate of 40%. The enacted tax rate for 2020 is 28%. What amount should be reported in its 2020 income statement as the current portion of its provision for income taxes?
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Concord Construction Company changed from the completed-contract to the percentage-of-completion method of accounting for long-term construction contracts during 2021. For tax purposes, the company employs the completed-contract method and will continue this approach in the future. (Hint: Adjust all tax consequences through the Deferred Tax Liability account.) The appropriate information related to this change is as follows. Pretax Income from: Percentage-of-Completion Completed-Contract Difference 2020 $747,000 $539,000 $208,000 2021 673,000 468,000 205,000 (a) Assuming that the tax rate is 30%, what is the amount of net income that would be reported in 2021?
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…
Troy Ltd., at the end of 2023, its first year of operations, prepared a reconciliation between pre- tax accounting income and taxable income as follows: Pre-tax accounting income $300,000 Excess CCA claimed for tax purposes ... (600, 000) Estimated expenses deductible when paid $200,000 Use of the depreciable assets will result in taxable 500,000 Taxable income ... amounts of $200,000 in each of the next three years. The estimated expenses of $500,000 will be deductible in 2026 when settlement is expected to be made. The enacted tax rate is 25% and is to increase to 30%, starting in 2024. Instructions a) Prepare a schedule of the deferred taxable and deductible amounts. b) Prepare the required adjusting entries to record income taxes for 2023
Norfolk Southern operates in an industry for which NOL carryback is not allowed, and had the following pretax income (loss) over its first three years of operations 2019 $ 1,200,000 2020 (900,000 ) 2021 1,500,000 For each year there were no deferred income taxes and the tax rate was 25%. No valuation account was deemed necessary for the deferred tax asset as of December 31, 2020. What was Norfolk Southern's income tax expense in 2021?
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