Tax Drill- ASC 740Ovate, Inc., earns $140,000 in book Income before tax and is subject to a 21% Federal income tax rate. Ovate records a single temporarydifference. Warranty expenses deducted for book purposes are $8,000 of which only $2,000 are deductible for tax purposes.Ovate has a deferred tax assetof

Answer:- Deferred income tax meaning:- Income taxes that are postponed and paid in a subsequent year…

Answered: Tax Drill-ASC 740 Ovate, Inc., earns…

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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Livia Company’s pretax income was $72,000. To compute taxable income, the following information is provided: Excess of estimated bad debts over write-offs $26,000 Penalty for late filing of income taxes 21,000 Excess of tax depreciation over accounting depreciation 36,000 Tax rate 20% What is the current portion of income tax? $12,400 $6200 $16,600 $22,600
Book taxable income for the year after taxes was $352,103, which includes the dividend income. Book federal income tax expense for the year was $93,597 Tax depreciation deduction exceeded book depreciation by $25,000. The corporation deducted from its book income $5,000 in entertainment-related expenses. The corporation paid a $4,000 government fine that was deducted from its book income. The corporation claimed a book deduction of $12,500 for allowance for doubtful accounts for receivables generated this year. It wrote-off $8,000 in receivables from prior years that were deemed uncollectible. Geo-Jack received a total of $30,000 in taxable dividends and deducted $21,500 for taxes as a dividends received deduction. Assume the amount of dividend income for book is the same as the amount of dividend income for tax. prepare Geo Jack's M-1 based on the following information
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?
Give answer with full explanation
Pretax accounting income is $206,000. Depreciation for tax is $111,000; depreciation for accounting is $29,000. Bad debt expense for tax is $12,000; bad debt expense for accounting is $9000. A fine for pollution of a river was imposed by the state of Kentucky for $7000. The tax rate is 20%. Which of the following is true? Income tax expense is 206,000 x .2 The current portion is 206,000 x .20 Income tax expense is less than the current portion. Income tax expense is more than the current portion.
Recording Income Tax Expense Rangee Rover Inc. had taxable income of $218,500 for the year. The GAAP basis of accounts receivable (net) is $13,800 less than the tax basis of accounts receivable. Assuming a tax rate of 25%, record the income tax journal entry on December 31. Assume zero beginning balances in deferred tax accounts. • Note: If a line in a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero). Date Account Name Cr. Dec. 31 Income Tax Expense Deferred Tax Liability Income Tax Payable N/A To record income tax expense. > > Dr. 54,625 0 0 O 0x 13,800 * 40,825 * 0
Lewes Company appropriately uses the installment sales method for tax purposes and the accrual method for revenue recognition for accounting purposes. Pertinent data at December 31, 2016, the close of the first year of operations, are as follows: Revenue Recognized Revenue Recognized Customer for Accounting Purposes for Tax Purposes Lowe's Builders $200,000 $100,000 Top Down Plumbing 500,000 350,000 Glass Plus Windows 600,000 350,000 Lewes's tax rate is 30%. What amount should be included in the deferred tax account at December 31, 2016 for these installment sales?
The XYZ, Inc. reported $50 million of taxable income. Its federal tax rate was 21% (ignore any possible state corporation taxes). What is the company’s federal income tax bill for the year? Question 1 options: a) $11,500,000 b) $10,500,000 c) $12,100,000 d) $11,100,000
Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages. Queno Company had FUTA taxable wages of $510,900 during the year. Determine its: (Round your answers to two decimal places.) a. gross FUTA tax $fill in the blank 1.b. FUTA tax credits (assuming no penalties) $fill in the blank 2.c. net FUTA tax $fill in the blank 3.
A5
On December 31, Year 1, ABC Corp had a deferred tax asset of $56,470. On December 31, Year 2, the deferred tax asset is $87,520. The company's Year 2 current tax expense is $98,790. What amount should the company report as total Year 2 income tax expense? 1. $62,660 2. $64,353 3. $66,047 4. $67,740 5. $69.434
Based on a more likely than not (MLTN) basis: Co. should only have claimed federal R&D credit of $8,000 Co. identified a bonus accrual at the end of YrX1 of $20,000 that should not have been deducted for tax purposes. This bonus accrual was new this year. For federal and state purposes, each jurisdiction assesses a 10% penalty on underpayment of taxes, and simple interest of 5% per year. g) What are the amounts of the unrecognized tax benefits? h) What are the penalties and interest resulting from these UTBs at 12/31/YrX1? i) What are the journal entries to book the effects of the unrecognized tax benefits? j) What is the total provision for income tax on a MLTN basis?

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