Sunland Corporation follows IFRS. Prior to 2022, the accounting income and taxable income for Sunland were the same. On January 1, 2022, the company purchased equipment at a cost of $1,224,000. For accounting purposes, the equipment was to be depreciated over six years using the straight-line method and no residual value. For income tax purposes, the equipment was subject to a CCA rate of 30% and was eligible for the Accelerated Investment Incentive (1.5 times the CCA rate applies for 2022). Sunland's income before tax for accounting purposes for 2023 was $13,000,000. The company was subject to a 20% income tax rate for all applicable years and anticipated profitable years for the foreseeable future. (a) Calculate the amount of the temporary difference for equipment and net change in deferred tax asset/liability. Net change in deferred tax asset/liability $

Sunland Corporation follows IFRS. Prior to 2022, the accounting income and taxable income for Sunland were the same. On January 1, 2022, the company purchased equipment at a cost of $1,224,000. For accounting purposes, the equipment was to be depreciated over six years using the straight-line method and no residual value. For income tax purposes, the equipment was subject to a CCA rate of 30% and was eligible for the Accelerated Investment Incentive (1.5 times the CCA rate applies for 2022). Sunland's income before tax for accounting purposes for 2023 was $13,000,000. The company was subject to a 20% income tax rate for all applicable years and anticipated profitable years for the foreseeable future. (a) Calculate the amount of the temporary difference for equipment and net change in deferred tax asset/liability. Net change in deferred tax asset/liability $

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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Milo Manufacturing uses straight-line depreciation for financial statement reporting and is able to deduct 100% of the cost of equipment in the year the equipment is purchased for tax purposes. Four years after its purchase, one of Milo’s manufacturing machines has a book value of $600,000. There were no other temporary differences and no permanent differences. Taxable income was $10 million and Milo’s tax rate is 25%. What is the deferred tax liability to be reported in the balance sheet? Assuming that the deferred tax liability balance was $175,000 the previous year, prepare the appropriate journal entry to record income taxes this year.
On January 1, 2018, Ameen Company purchased major pieces of manufacturing equipment for a total of $36 million. Ameen uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. At December 31, 2020, the book value of the equipment was $30 million and its tax basis was $20 million. At December 31, 2021, the book value of the equipment was $28 million and its tax basis was $12 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2021 was $50 million. Required: 1. Prepare the appropriate journal entry to record Ameen's 2021 income taxes. Assume an income tax rate of 25%. 2. What is Ameen's 2021 net income?
Sheridan Inc's only temporary difference at the beginning and end of 2024 is caused by a $3.54 million deferred gain for tax purposes for an installment sale of a plant asset, and the related receivable (only one-half of which is classified as a current asset) is due in equal installments in 2025 and 2026. The related deferred tax liability at the beginning of the year is $1,062,000. In the third quarter of 2024, a new tax rate of 20% is enacted into law and is scheduled to become effective for 2026. Taxable income for 2024 is $5,900,000. and taxable income is expected in all future years. (a) Your answer is incorrect. Determine the amount reported as a deferred tax liability at the end of 2024. Deferred tax liability $ eTextbook and Media List of Accounts Save for Later Last saved 15 hours ago Attomu
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Milo Manufacturing uses straight-line depreciation for financial statement reporting and is able to deduct 100% of the cost of equipment in the year the equipment is purchased for tax purposes. Four years after its purchase, one of Milo's manufacturing machines has a book value of $740,000. There were no other temporary differences and no permanent differences. Taxable income was $24 million and Milo’s tax rate is 25%.What is the deferred tax liability to be reported in the balance sheet? Assuming that the deferred tax liability balance was $245,000 the previous year, prepare the appropriate journal entry to record income taxes this year.
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Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is Ameen's 2021 net income? (Enter your answers in millions rounded to 2 decimal place (i.e., 10,000,000 should be entered as 10.00).) Net income million