Sheridan Company reports pretax financial income of $73,500 for 2025. The following items cause taxable income to be different than pretax financial income. Depreciation on the tax return is greater than depreciation on the income statement by $17,600. 1. 2. Rent collected on the tax return is greater than rent recognized on the income statement by $19,900. 3. Fines for pollution appear as an expense of $10,500 on the income statement. Sheridan's tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2025. (a) Your answer is correct. Compute taxable income and income taxes payable for 2025. (b) Taxable income 86300 Income taxes payable 25890 eTextbook and Media Solution Pretax financial income for 2025 $73,500 Excess depreciation per tax return (17,600) Excess rent collected over rent earned 19,900 Nondeductible fines 10,500 Taxable income $86,300 Taxable income $86,300 Enacted tax rate 30% Income taxes payable $25,890 List of Accounts Assistance Used Attempts: unlimited Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2025. (List all debit entries before credit entries. Credit account titles are automatically indented when 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.) Account Titles and Explanation eTextbook and Media List of Accounts Save for Later Debit Credit Attempts: unlimited Submit Answer
Sheridan Company reports pretax financial income of $73,500 for 2025. The following items cause taxable income to be different than pretax financial income. Depreciation on the tax return is greater than depreciation on the income statement by $17,600. 1. 2. Rent collected on the tax return is greater than rent recognized on the income statement by $19,900. 3. Fines for pollution appear as an expense of $10,500 on the income statement. Sheridan's tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2025. (a) Your answer is correct. Compute taxable income and income taxes payable for 2025. (b) Taxable income 86300 Income taxes payable 25890 eTextbook and Media Solution Pretax financial income for 2025 $73,500 Excess depreciation per tax return (17,600) Excess rent collected over rent earned 19,900 Nondeductible fines 10,500 Taxable income $86,300 Taxable income $86,300 Enacted tax rate 30% Income taxes payable $25,890 List of Accounts Assistance Used Attempts: unlimited Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2025. (List all debit entries before credit entries. Credit account titles are automatically indented when 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.) Account Titles and Explanation eTextbook and Media List of Accounts Save for Later Debit Credit Attempts: unlimited Submit Answer
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter3: Taxes On The Financial Statements
Section: Chapter Questions
Problem 4BCRQ
Related questions
Question
Transcribed Image Text:Sheridan Company reports pretax financial income of $73,500 for 2025. The following items cause taxable income to be different
than pretax financial income.
Depreciation on the tax return is greater than depreciation on the income statement by $17,600.
1.
2.
Rent collected on the tax return is greater than rent recognized on the income statement by $19,900.
3.
Fines for pollution appear as an expense of $10,500 on the income statement.
Sheridan's tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred
taxes at the beginning of 2025.
(a)
Your answer is correct.
Compute taxable income and income taxes payable for 2025.
(b)
Taxable income
86300
Income taxes payable
25890
eTextbook and Media
Solution
Pretax financial income for 2025
$73,500
Excess depreciation per tax return
(17,600)
Excess rent collected over rent earned
19,900
Nondeductible fines
10,500
Taxable income
$86,300
Taxable income
$86,300
Enacted tax rate
30%
Income taxes payable
$25,890
List of Accounts
Assistance Used
Attempts: unlimited
Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2025. (List all debit
entries before credit entries. Credit account titles are automatically indented when 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.)
Account Titles and Explanation
eTextbook and Media
List of Accounts
Save for Later
Debit
Credit
Attempts: unlimited
Submit Answer
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