Sweet Corporation began operations in 2025 and reported pretax financial income of $246,000 for the year. Sweet's tax depreciationexceeded its book depreciation by $39,000. Sweet's tax rate for 2025 and years thereafter is 30%. Assume this is the only differencebetween Sweet's pretax financial income and taxable income.Prepare the journal entry to record the income tax expense, deferred income taxes, and income taxes payable. (List all debit entriesbefore 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 ExplanationDebitCreditShow how the deferred tax liability will be classified on the December 31, 2025, balance sheet.Deferred tax liability should be classified as aon the December 31, 2025, balance sheet.

Step 1 : Calculate Taxable Income:Financial Income: $246,000Tax Depreciation Excess: $39,000Taxable…

Answered: Sweet Corporation began operations in…

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter20: Corporations And Parterships

Section: Chapter Questions

Problem 15DQ

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Similar questions

In the current year, Madison Corporation had 50,000 of taxable income at a tax rate of 25%. During the year, Madison began offering warranties on its products and has a Warranty liability for financial reporting purposes of 5,000 at the end of the year. Warranty expenses are not deductible until paid for income tax purposes. Prepare the journal entry to record Madisons income taxes at the end of the year.
Prior to and during 2019, Shadrach Company reported tax depreciation at an amount higher than the amount of financial depreciation, resulting in a book value of the depreciable assets of 24,500 for financial reporting purposes and of 20,000 for tax purposes at the end of 2019. In addition, Shadrach recognized a 3,500 estimated liability for legal expenses in the financial statements during 2019; it expects to pay this liability (and deduct it for tax purposes) in 2023. The current tax rate is 30%, no change in the tax rate has been enacted, and the company expects to be profitable in future years. What is the amount of the net deferred tax liability at the end of 2019? a. 300 b. 450 c. 1,050 d. 1,350
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.
Quince Corporation has taxable income of $485,000 for its calendar tax year. Calculate the corporation's income tax liability for 2019 before tax credits. $________________
Grevilla Corporation is a manufacturing company. The corporation has accumulated earnings of $950,000, and it can establish reasonable needs for $400,000 of that amount. Calculate the amount of the accumulated earnings tax (if any) that Grevilla Corporation is subject to for this year. $_____________
Consider the following accounts and determine if the account is a current liability, a noncurrent liability, or neither. A. cash B. federal income tax payable this year C. long-term note payable D. current portion of a long-term note payable E. note payable due in four years F. interest expense G. state income tax
Comprehensive Colt Company reports pretax financial income of 143,000 in 2019. In addition to pretax income from continuing operations (of which revenues are 295,000), the following items are included in this pretax income: Colts taxable income totals 93,000 in 2019. The difference between the pretax financial income and the taxable income is due to the excess of tax depreciation over financial depreciation on assets used in continuing operations. At the beginning of 2019, Colt had a retained earnings balance of 310.000 and a deferred tax liability of 8,100. During 2019, Colt declared and paid dividends of 48,000. It is subject to tax rates of 15% on the first 50,000 of income and 30% on income in excess of 50,000. Based on proper interperiod tax allocation procedures, Colt has determined that its 2019 ending deferred tax liability is 14,100. Required: 1. Prepare a schedule for Colt to allocate the total 2019 income tax expense to the various components of pretax income. 2. Prepare Colts income tax journal entry at the end of 2019. 3. Prepare Colts 2019 income statement. 4. Prepare Colts 2019 statement of retained earnings. 5. Show the related income tax disclosures on Colts December 31, 2019, balance sheet.
Sandhill Corporation began operations in 2020 and reported pretax financial income of $226,000 for the year. Sandhill’s tax depreciation exceeded its book depreciation by $39,000. Sandhill’s tax rate for 2020 and years thereafter is 30%. Assume this is the only difference between Sandhill’s pretax financial income and taxable income.Prepare the journal entry to record the income tax expense, deferred income taxes, and income taxes payable. (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 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount Show how the deferred tax liability will be classified on the December 31, 2020,…
Sheridan Corporation began operations in 2020 and reported pretax financial income of $212,000 for the year. Sheridan's tax depreciation exceeded its book depreciation by $33,000. Sheridan's tax rate for 2020 and years thereafter is 30%. Assume this is t only difference between Sheridan's pretax financial income and taxable income. Prepare the journal entry to record the income tax expense, deferred income taxes, and income taxes payable. (Credit account titles
Skysong Corporation began operations in 2025 and reported pretax financial income of $212,000 for the year. Skysong's tax depreciation exceeded its book depreciation by $33,000. Skysong's tax rate for 2025 and years thereafter is 30%. Assume this is the only difference between Skysong's pretax financial income and taxable income. Prepare the journal entry to record the income tax expense, deferred income taxes, and income taxes payable. (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 Show how the deferred tax liability will be classified on the December 31, 2025, balance sheet. Deferred tax liability should be classified as a Debit to search Credit on the December 31, 2025, balance sheet.
Sunland Corporation began operations in 2020 and reported pretax financial income of $212,000 for the year. Sunland’s tax depreciation exceeded its book depreciation by $33,000. Sunland’s tax rate for 2020 and years thereafter is 30%. Assume this is the only difference between Sunland’s pretax financial income and taxable income.Prepare the journal entry to record the income tax expense, deferred income taxes, and income taxes payable. Show how the deferred tax liability will be classified on the December 31, 2020, balance sheet. Deferred tax liability should be classified as a a) current asset b) current liability c) non current asset or d) non current liability on the December 31, 2020, balance sheet.
Current Cullumber Corporation began operations in 2025 and reported pretax financial income of $226,000 for the year. Cullumber's tax depreciation exceeded its book depreciation by $39,000. Cullumber's tax rate for 2025 and years thereafter is 30%. Assume this only difference between Cullumber's pretax financial income and taxable income. Prepare the journal entry to record the income tax expense, deferred income taxes, and income taxes payable. (List all debit en before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit Show how the deferred tax liability will be classified on the December 31, 2025, balance sheet. Deferred tax liability should be classified as a on the December 31, 2025, balance sheet.

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