TGW, a calendar year corporation, reported $4,016,000 net income before tax on its financial statements prepared in accordance with GAAP. The corporation's records reveal the following information: • TGW's depreciation expense per books was $457,000, and its MACRS depreciation deduction was $382,400. • TGW capitalized $687,000 indirect expenses to manufactured inventory for book purposes and $820,000 indirect expenses to manufactured inventory for tax purposes. • TGW's cost of manufactured goods sold was $2,566,000 for book purposes and $2,656,000 for tax purposes. • Four years ago, TGW capitalized $2,304,000 goodwill when it purchased a competitor's business. This year, TGW's auditors required the corporation to write the goodwill down to $1,545,000 and record a $759,000 goodwill impairment expense. Required: Compute TGW's taxable income. (Do not round intermediate calculations. Amounts to be deducted should be indicated with a minus sign.) Amount TGW's net book income before tax Adjustments: Depreciation Indirect inventory costs Cost of goods sold Book goodwill impairment expense Tax amortization of goodwill TGW's taxable income

TGW, a calendar year corporation, reported $4,016,000 net income before tax on its financial statements prepared in accordance with GAAP. The corporation's records reveal the following information: • TGW's depreciation expense per books was $457,000, and its MACRS depreciation deduction was $382,400. • TGW capitalized $687,000 indirect expenses to manufactured inventory for book purposes and $820,000 indirect expenses to manufactured inventory for tax purposes. • TGW's cost of manufactured goods sold was $2,566,000 for book purposes and $2,656,000 for tax purposes. • Four years ago, TGW capitalized $2,304,000 goodwill when it purchased a competitor's business. This year, TGW's auditors required the corporation to write the goodwill down to $1,545,000 and record a $759,000 goodwill impairment expense. Required: Compute TGW's taxable income. (Do not round intermediate calculations. Amounts to be deducted should be indicated with a minus sign.) Amount TGW's net book income before tax Adjustments: Depreciation Indirect inventory costs Cost of goods sold Book goodwill impairment expense Tax amortization of goodwill TGW's taxable income

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 the calendar year 2021, ABC Corporation, a retailer, has gross sales of Pl.4 billion, cost of sales of PS60 million, and permitted deductions of PISO million. Its total assets of PI80 million as of December 31, 2021, according to Audited Financial Statements, including PSO million in land and P25 million in building where the business entity is located, for a total of P75 million in fixed assets. Calkulate the Income Tax Due for CY 2021, assuming ABC Corporation is in its fifth year of operation.
Haresh G
St. George, Incorporated reported $711,800 net income before tax on this year’sfinancial statement prepared in accordance with GAAP. The corporation’s recordsreveal the following information:Four years ago, St. George realized a $283,400 gain on the sale of investmentproperty and elected the installment sale method to report the sale for taxpurposes. Its gross profit percentage is 50.12, and it collected $62,000 principaland $14,680 interest on the installment note this year.Five years ago, St. George purchased investment property for $465,000 cash froman LLC. Because St. George and the LLC were related parties, the LLC’s $12,700realized loss on the sale was disallowed for tax purposes. This year, St. George soldthe property to an unrelated purchaser for $500,000.A flood destroyed several antique carpets that decorated the floors of corporateheadquarters. Unfortunately, St. George’s property insurance does not coverdamage caused by rising water, so the loss was uninsured. The carpets’…
previously answers were incorrect. Can someone take another look?
XYZ is a calendar-year corporation that began business on January 1, 2021. For the year, it reported the following information in its current-year audited income statement. Notes with important tax information are provided below. XYZ corporation Income statement For current year Book Income Revenue from sales $ 40,000,000 Cost of Goods Sold (27,000,000) Gross profit $ 13,000,000 Other income: Income from investment in corporate stock 300,0001 Interest income 20,0002 Capital gains (losses) (4,000) Gain or loss from disposition of fixed assets 3,0003 Miscellaneous income 50,000 Gross Income $ 13,369,000 Expenses: Compensation (7,500,000)4 Stock option compensation (200,000)5 Advertising (1,350,000) Repairs and Maintenance (75,000) Rent (22,000) Bad Debt expense (41,000)6 Depreciation (1,400,000)7 Warranty expenses (70,000)8 Charitable donations (500,000)9 Meals (all at restaurants) (18,000) Goodwill impairment (30,000)10…
Li Corporation reported pretax book income of $660,000. Tax depreciation exceeded book depreciation by $412, 000. Li's beginning book (tax) basis in its fixed assets was $1,960,000 ($1,748, 000) and its ending book (tax) basis is $1,860,000 ($1, 272, 000). In addition, the company received $360, 000 of tax-exempt municipal bond interest. The company's prior - year tax return showed taxable income of $49,000. Assuming a tax rate of 21 percent, compute the company's deferred income tax expense or benefit.
Iowa Corporation began operations in January 2021 and purchased an equipment for $60,000. Iowa uses straight-line depreciation over 4 years, for financial reporting purposes. For tax purposes, the equipment is fully depreciated in the year of purchase. Pretax accounting income for 2021 was $200,000, which includes interest revenue of $30,000 from municipal bonds. The enacted tax rate is 25% for all years. There are no other differences between accounting and taxable income. Required: a. Calculate taxable income in 2021. b. Prepare journal entry in 2021. c. Prepare journal entry assuming taxable income in 2022 is $180,000.
The profit and loss statement of Treadwell Ltd., an S corporation, shows $265,000 book income. Treadwell is owned equally by four shareholders. From supplemental data, you obtain the following information about items that are included in book income. (attached image) a. Compute Treadwell's nonseparately stated income or loss for the tax year. b. What would be the share of this year's nonseparately stated income or loss items for Leo Lion, one of the Treadwell shareholders? c. What is Leo Lion's share of tax-exempt interest income, if any?
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
am.115.
In the current year, Vorschusse Corporation (a calendar year C corporation) had operating income of $82,000 and operating expenses of $66,000. In addition, Vorschusse had a long-term capital gain of $5,000 and a short-term capital loss of $6,000. a. Compute Vorschusse's taxable income and tax for the year. Taxable income: $__________Income tax: $_______________ b. Assume the same facts except that Vorschusse's long-term capital gain was $8,000. Compute Vorschusse's taxable income and tax for the year. Taxable income: $____________Income tax: $________________
Q.6.