Taxable income and pretax financial income would be identical for Blue Co. except for its treatments of gross profit on installment sales and estimated costs of warranties. The following income computations have been prepared.Taxable income202420252026Excess of revenues over expenses (excluding two temporary differences) $154,000$191.000$88,100Installment gross profit collected8,5008,5008,500Expenditures for warrantiesTaxable income(4,500)$158,000(4,500)$195,000(4,500)$92,100Pretax financial income202420252026Excess of revenues over expenses (excluding two temporary differences)Installment gross profit recognized$154,000$191,000$88,10025,500-0--0-Estimated cost of warrantiesIncome before taxes(13,500)$166,000-0--0-$191,000$88,100The tax rates in effect are 2024, 20%; 2025 and 2026, 25%. All tax rates were enacted into law on January 1, 2024. No deferred income taxes existed at the beginning of 2024. Taxable income is expected in all future years.Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2024, 2025, and 2026. (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 Entryfor the account titles and enter O for the amounts.)DateAccount Titles and ExplanationDebitCredit

Deferred tax:The difference between the income recognition under income tax law and accounting…

Taxable income Excess of revenues over expenses (excluding two temporary differences) $154,000 Installment gross proft collected Expenditures for warranties Taxable income 2024 2025 2026 $191.000 $88,100 8.500 8.500 8,500 (4.500) (4500) (4.500) $158,000 $195,000 $92,100 Pretax financial income 2024 2025 2026 Excess of revenues over expenses (excluding two temporary differences) $154,000 $191.000 $88.100 Installment gross profit recognized 25,500 -O Estimated cost of warranties (13,500) Income before taxes $166.000 $191.000 $88.100 The tax rates in effect are 2024, 20%: 2025 and 2026, 25%. All tax rates were enacted into law on January 1, 2024. No deferred income taxes existed at the beginning of 2024. Taxable income is expected in all future years

Taxable income Excess of revenues over expenses (excluding two temporary differences) $154,000 Installment gross proft collected Expenditures for warranties Taxable income 2024 2025 2026 $191.000 $88,100 8.500 8.500 8,500 (4.500) (4500) (4.500) $158,000 $195,000 $92,100 Pretax financial income 2024 2025 2026 Excess of revenues over expenses (excluding two temporary differences) $154,000 $191.000 $88.100 Installment gross profit recognized 25,500 -O Estimated cost of warranties (13,500) Income before taxes $166.000 $191.000 $88.100 The tax rates in effect are 2024, 20%: 2025 and 2026, 25%. All tax rates were enacted into law on January 1, 2024. No deferred income taxes existed at the beginning of 2024. Taxable income is expected in all future years

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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Taxable income and pretax financial income would be identical for Sweet Co. except for its treatments of gross profit on installment sales and estimated costs of warranties. The following income computations have been prepared. Taxable income 2024 2025 2026 Excess of revenues over expenses (excluding two temporary differences) $166,000 $212,000 $97,900 Installment gross profit collected 8,000 8,000 8,000 Expenditures for warranties Taxable income (5,200) (5,200) (5,200) $168,800 $214,800 $100,700 Pretax financial income 2024 2025 2026 Excess of revenues over expenses (excluding two temporary differences) $166,000 $212,000 $97,900 Installment gross profit recognized 24,000 -0- -0- Estimated cost of warranties (15,600) -0- -0- Income before taxes $174,400 $212,000 $97,900 The tax rates in effect are 2024, 20%; 2025 and 2026, 25%. All tax rates were enacted into law on January 1, 2024. No deferred income taxes existed at the beginning of 2024. Taxable income is expected in all future…
Exercise 16-6 (Algo) Temporary difference; income tax payable given [LO16-3] In 2024, DFS Medical Supply collected rent revenue for 2025 tenant occupancy. For income tax reporting, the rent is taxed when collected. For financial statement reporting, the rent is recorded as deferred revenue and then recognized as revenue in the period tenants occupy the rental property. The deferred portion of the rent collected in 2024 amounted to $390,000 at December 31, 2024. DFS had no temporary differences at the beginning of the year. Required: Assuming an income tax rate of 25% and 2024 income tax payable of $940,000, prepare the journal entry to record income taxes for 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet
taxable income : 1225000 income taxes payable: 245000
Required information Problem 16-8 Multiple differences; taxable income given; two years; balance sheet classification; change in tax rate [LO16-4, 16-6, 16-8] [The following information applies to the questions displayed below.] Arndt, Inc., reported the following for 2018 and 2019 ($ in millions): 2018 2019 Revenues $ 995 $1,073 Expenses Pretax accounting income (income statement) Taxable income (tax return) 800 840 $ 195 $ 195 233 $ 245 Tax rate: 40% a. Expenses each year include $30 million from a two-year casualty insurance policy purchased in 2018 for $60 million. The cost is tax deductible in 2018. b. Expenses include $2 million insurance premiums each year for life insurance on key executives. c. Arndt sells one-year subscriptions to a weekly journal. Subscription sales collected and taxable in 2018 and 2019 were $39 million and $57 million, respectively. Subscriptions included in 2018 and 2019 financial reporting revenues were $36 million ($14 million collected in 2017 but not…
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The pretax financial income of x company differs from its taxable income throughout each of 4 years as follows Year. Pretax Financial Income. Taxable income. Tax rate 2020. 305,000. 173,000. 35% 2021. 349,000. 216,000. 20% 2022 358,000 277,000 20% 2023 429,000 615,000 20% Pretax fiancial income for each year includes a nondeductible exense of $29,100 (never deductible for tax purposes) The remainder of the difference between pretax fiancial income and taxable income in each period is due to one depreciation temporary difference. No deferred income taxes existed at the beginning of 2020. Prepare journal entries to record income taxes in all 4 years. Assue that the change in the tax rate to 20% was not enacted until the beginning of 2021
Problem 9-9 The FICA Tax (LO 9.3) (No COVID-19 provisions) Fiduciary Investments paid its employee, Yolanda, wages of $144,700 in 2021. Calculate the FICA tax: If required, round your answers to two decimal places. Withheld from Yolanda's wages: Social Security Medicare Paid by Fiduciary: Social Security Medicare Total FICA Tax
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The pretax financial income of Truttman Company differs from its taxable income throughout each of 4 years as follows. Pretax Year Financial Income 2020 2021 2022 2023 $290,000 320,000 350,000 420,000 Taxable Income $180,000 225,000 260,000 560,000 Show Transcribed Text Pretax financial income for each year includes a nondeductible expense of $30,000 (never deductible for tax purposes). The remainder of the difference between pretax financial income and taxable income in each period is due to one depreciation temporary difference. No deferred income taxes existed at the beginning of 2020. 0 Prepare the income statement for 2021, beginning with income before income taxes. (Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) 0 O Tax Rate 35 % 20 % 20 % 20 % 0 Truttman Company Income Statement (Partial) O C S 000 G SUPPORT
Exercise 16-10 (Algo) Calculate income tax amounts under various circumstances; financial statement effects [LO16-2, 16-3] Four independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences: ($ in thousands) Taxable income Future deductible amounts Future taxable amounts. Balance(s) at beginning of the year: Deferred tax asset Deferred tax liability The enacted tax rate is 25%. Required: Situation 1 2 3 4 $ 112 $ 244 $ 252 $ 344 16 20 20 16 16 56 2 16 8 2 For each situation, determine the following: Note: Enter your answers in thousands rounded to one decimal place (i.e. 1,200 should be entered as 1.2). Negative amounts should be indicated by a minus sign. Leave no cell blank, enter "O" wherever applicable. a. Income tax payable currently. b. Deferred tax asset-ending balance. c. Deferred tax asset-change. d. Deferred tax liability-ending balance. e. Deferred tax liability change. f. Income tax…
Problem 16-145 Four independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences reported first on: Income Statement Tax Return Revenue Expense Revenue Expense $21,000 (1.) (2.) (3.) (4.) $21,000 $15, 200 $21,000 $15, 200 $21, 000 $10, 200 Required: For each situation, determine the taxable income assuming pretax accounting income is $100,000. (Amounts to be deducted should be indicated by a minus sign.) 1 2 3 4 Accounting income Temporary differences: Income statement first: Revenue Expense Tax return first: Revenue Expense Taxable income