Superior Developers sells lots for residential development. When lots are sold, Superior recognizes income forfinancial reporting purposes in the year of the sale. For some lots, Superior recognizes income for tax purposeswhen the cash is collected. In 2020, Superior sold lots for $20 million for which no cash was collected at the timeof the sale. This cash will be collected equally over 2021 and 2022. The enacted tax rate was 40% at the time ofthe sale. In 2021, a new tax law was enacted, revising the tax rate from 40% to 25% beginning in 2022.Calculate the total amount by which Superior should change its deferred tax liability in 2021. (Enter your answer inmillions rounded to 1 decimal place (i.e., 10,000,000 should be entered as 10).)The deferred tax liability willmillion.

Deferred tax liability (last year): 20 million * 40% $8.00MillionDeferred tax liability (this year)…

Answered: Superior Developers sells lots for…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter6: Business Expenses

Section: Chapter Questions

Problem 53P

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How do the all events and economic performance requirements apply to the following transactions by an accrual basis taxpayer? a. The company guarantees its products for six months. At the end of 2019, customers had made valid claims for 600,000 that were not paid until 2020. Also, the company estimates that another 400,000 in claims from 2019 sales will be filed and paid in 2020. b. The accrual basis taxpayer reported 200,000 in corporate taxable income for 2019. The state income tax rate was 6%. The corporation paid 7,000 in estimated state income taxes in 2019 and paid 2,000 on 2018 state income taxes when it filed its 2018 state income tax return in March 2019. The company filed its 2019 state income tax return in March 2020 and paid the remaining 5,000 of its 2019 state income tax liability. c. An employee was involved in an accident while making a sales call. The company paid the injured victim 15,000 in 2019 and agreed to pay the victim 15,000 a year for the next nine years.
Superior Developers sells lots for residential development. When lots are sold, Superior recognizes income for financial reporting purposes in the year of the sale. For some lots, Superior recognizes income for tax purposes when the cash is collected. In 2020, Superior sold lots for $20 for which no cash was collected at the time of the sale. This cash will be collected equally over 2021 and 2022. The enacted tax rate was 40% at the time of the sale. In 2021, a new tax law was enacted, revising the tax rate from 40% to 25% beginning in 2022. Calculate the total amount by which Superior should change its deferred tax liability in 2021.
Superlor Developers sells lots for residential development. When lots are sold, Superior recognizes income for financial reporting purposes in the year of the sale. For some lots, Superior recognizes income for tax purposes when the cash is collected. In 2023, Superior sold lots for $110 million, for which no cash was collected at the time of the sale. This cash will be collected equally over 2024 and 2025. The enacted tax rate was 40% at the time of the sale. In 2024, a new tax law was enacted, revising the tax rate from 40% 10 30% beginning in 2025. Calculate the total amount by which Superior should change its deferred tax liabllity in 2024. Note: Enter your answer in millions rounded to 2 decimal places (i. e., 5,500,000 should be entered as 5, 50).
Superior Developers sells lots for residential development. When lots are sold, Superior recognizes income for financial reporting purposes in the year of the sale. For some lots, Superior recognizes income for tax purposes when collected. In the prior year, income recognized for financial reporting purposes for lots sold this way was $20 million, which would be collected equally over the next two years. The enacted tax rate was 40%. This year, a new tax law was enacted, revising the tax rate from 40% to 35% beginning next year. Calculate the amount by which Superior should reduce its deferred tax liability this year.
Tru Developers, Inc., sells plots of land for industrial development. Tru recognizes income for financial reporting purposes in the year it sells the plots. For some of the plots sold this year, Tru took the position that it could recognize the income for tax purposes when the installments are collected. Income that Tru recognized for financial reporting purposes in 2021 for plots in this category was $80 million. The company expected to collect 60% of each sale in 2022 and 40% in 2023. This amount over the next two years is as follows: 2022 $ 48 million 2023 32 million total $ 80 million Tru’s pretax accounting income for 2021 was $120 million. In its income statement, Tru reported interest income of $25 million, unrelated to the land sales, for which the company’s position is that the interest is not taxable. Accordingly, the interest was not reported on the tax return. There are no differences between accounting income and taxable income other than those described…
In 2021, Ryan Management collected rent revenue for 2022 tenant occupancy. For financial reporting, the rent is recorded as deferred revenue and then recognized as revenue in the period tenants occupy rental property. For tax reporting, the rent is taxed when collected in 2021. The deferred portion of the rent collected in 2021 was $130.0 million. No temporary differences existed at the beginning of the year, and the tax rate is 25%. Suppose the deferred portion of the rent collected was $60 million at the end of 2022. Taxable income is $520 million. Prepare the appropriate journal entry to record income taxes in 2022.
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In 2021, Ryan Management collected rent revenue for 2022 tenant occupancy. For financial reporting, the rent is recorded as deferred revenue and then recognized as revenue in the period tenants occupy rental property. For tax reporting, the rent is taxed when collected in 2021. The deferred portion of the rent collected in 2021 was $74 million. Taxable income is $300 million in 2021. No temporary differences existed at the beginning of the year, and the tax rate is 25%. Prepare the appropriate journal entry to record income taxes in 2021.
In 2018, Ryan Management collected rent revenue for 2019 tenant coccupancy. For financial reporting, the rent is recorded as deferred revenue and then reconized as income in the period tenants occupy rental property, but for income tax reporting it is taxed when collected. the deferred portion of the rent collected in 2018 was 65 million. taxable income is 190 million. no temporary differences existed at the beginning of the year, and the tax rate is 40 percent. suppose the deferred portion of the rent collected was 55 million at the end of 2019. taxable income is 210 million. prepare the appropriate journal entry to record income taxes?
In 2018, Ryan Management collected rent revenue for 2019 tenant occupancy. For financial reporting, the rent isrecorded as deferred revenue and then recognized as income in the period tenants occupy rental property, but forincome tax reporting it is taxed when collected. The deferred portion of the rent collected in 2018 was $50 million. Taxable income is $180 million. No temporary differences existed at the beginning of the year, and the taxrate is 40%. Prepare the appropriate journal entry to record income taxes.
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