Tate, Inc. owns 80 percent of Jeffrey, Inc. During the current year, Jeffrey sold merchandise costing $60,000 to Tate for $75,000. At the end of the year, 10 percent of this merchandise was still being held. The tax rate is 30 percent. Assuming that a consolidated income tax return is being filed, what deferred income tax asset is created?

Tate, Inc. owns 80 percent of Jeffrey, Inc. During the current year, Jeffrey sold merchandise costing $60,000 to Tate for $75,000. At the end of the year, 10 percent of this merchandise was still being held. The tax rate is 30 percent. Assuming that a consolidated income tax return is being filed, what deferred income tax asset is created?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Pretax accounting income $ 300,000 Permanent difference (15,000 ) 285,000 Temporary difference-depreciation (20,000 ) Taxable income $ 265,000 Tringali's tax rate is 25%. Assume that no estimated taxes have been paid. What should Tringali report as its deferred income tax liability as of the end of its first year of operations?
Alex Co., a calendar year end corporation, reported pretax income of S40,000 for the first quater of Year 5. The statutory tax rate for Year 5 is 20%. Alex's effective annual income tax rate for Year 4 was 18%. As of the first quarter of Year 5, Alex calculated its first quarter effective tax rate to 15% and estimages its Year ETR will be 12%. What amount should Alex report as income tax expense in its interim income statement for the first quarter of Year 5.
Mr. Pamplona earned total gross receipts of P800,000 and paid P300,000 in expenses in his accounting practice. During the same year, he also earned a total of P60,000 net gain from the sale of domestic stocks directly to a buyer. He also disposed a vacant lot at a net gain of P140,000. What is the taxable income of Mr. Pamplona subject to regular income tax?
Christopher Corporation is subject to a 40% income tax rate. The following amounts were taken from the records: income before income taxes $100,000 and taxable income $120,000. Instructions: record the adjusting entry.
During the current year, Newtech Corporation sold a segment of its business at a loss of $225,000. Until it was sold, the segment had a current period operating loss of $200,000. The company had $750,000 from continuing operations for the current year. Prepare the lower part of the income statement, beginning with the $750,000 income from continuing operations. Follow tax allocation procedures, assuming that all changes in income are subject to a 40% income tax rate. Disregard earnings per share disclosures. Newtech Corporation Partial Income Statement Income from continuing operations Discontinued operations Current Year Loss from operations of discontinued segment (net of tax) $ 200,000 Loss on disposal of discontinued segment (net of tax) Net income $ 750,000 0 0 $ 0
Illusions Inc. just completed its second year of operations and has a deferred tax asset of $43,700 related to a net operating loss of $115,000 from the previous year. In the current year Illusions generates $390,000 in revenues and incurs $260,000 in expenses. There are no permanent or temporary book-tax differences. Assuming the same tax rate as last year, what amount will Illusions record for Income Tax Payable in the current year? Group of answer choices Cannot be determined from the information provided. $49,400 $5700 $148,200
Perkin Corporation has determined that it qualifies for a tax credit in the amount of $120,000. For the current year, it has tax liability before credits of $75,000. It expects at least that amount of tax liability next year. Required: If the excess credit is not refundable but may be carried forward, calculate the value of the credit. Assume Perkins uses a 4 percent discount rate to calculate present value. If the excess credit is refundable, what is the value of the credit?
Pyri Flours, a sole proprietorship, owes $9, 741 in taxes on taxable income of $61,509. If the firm earns $100 more in income, it will owe an additional $22 in taxes. What is the average tax rate on income of $61,609?
Feather, Inc. has net income of $3,500,000. The company‘s depreciation expense is $680,000, its interest expense is $300,000, and its income tax rate is 45%. What is its taxable income?
XYZ made four equal estimated tax payments totaling $440,000 ($110,000 per quarter). For purposes of estimated tax liabilities, assume XYZ was in existence in 2021 and that in 2021 it reported a tax liability of $612,000. During 2022, XYZ determined its taxable income at the end of each of the four quarters as follows: Quarter-end First Second Third Finally, assume that XYZ is not a large corporation for purposes of estimated tax calculations. Note: Do not round intermediate calculations. Round your answers to the nearest dollar amount. Required: a. Compute XYZ's taxable income. b. Compute XYZ's income tax liability. e. Determine the quarters for which XYZ is subject to underpayment of estimated tax penalties. Note: Round "Annualization Factor" for Fourth quarter to 2 decimal places. Complete this question by e ering your answers in the tabs below. Required A Cumulative taxable income (loss) $ 470,000 $ 1,170,000 $1,699,700 Installment Determine the quarters for which XYZ is subject to…