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The accounting income of Cullumber Corporation and its taxable income for the years 2023 to 2026 are as follows: Year Accounting Income 2023 2024 2025 2026 $469,000 429,000 392,000 469,000 Taxable Income $301,000 303,000 310,000 643,000 Tax Rate 25% 30% 30% 30%

The accounting income of Cullumber Corporation and its taxable income for the years 2023 to 2026 are as follows: Year Accounting Income 2023 2024 2025 2026 $469,000 429,000 392,000 469,000 Taxable Income $301,000 303,000 310,000 643,000 Tax Rate 25% 30% 30% 30%

FINANCIAL ACCOUNTING
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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The accounting income of Cullumber Corporation and its taxable income for the years 2023 to 2026 are as follows: Year Accounting Income 2023 2024 2025 2026 (a) $469,000 - 429,000 392,000 469,000 Taxable Income $301,000 303,000 Your answer is partially correct. 310,000 643,000 Tax Rate 25% 30% The change in the tax rate from 25% to 30% was not enacted until early in 2024. Accounting income for each year includes an expense of $45,000 that will never be deductible for tax purposes. The remainder of the difference between accounting income and taxable income in each period is due to one reversing difference for the depreciation of property, plant, and equipment. No deferred taxes existed at the beginning of 2023. 30% 30% Calculate the current and deferred tax expense or benefit for each of the four years. Also calculate the balance of the deferred tax balance sheet account at the end of each fiscal year from 2023 to 2026. (Show asset and benefit numbers as positive, and liability and expense numbers as negative.)
Transcribed Image Text:The accounting income of Cullumber Corporation and its taxable income for the years 2023 to 2026 are as follows: Year Accounting Income 2023 2024 2025 2026 (a) $469,000 - 429,000 392,000 469,000 Taxable Income $301,000 303,000 Your answer is partially correct. 310,000 643,000 Tax Rate 25% 30% The change in the tax rate from 25% to 30% was not enacted until early in 2024. Accounting income for each year includes an expense of $45,000 that will never be deductible for tax purposes. The remainder of the difference between accounting income and taxable income in each period is due to one reversing difference for the depreciation of property, plant, and equipment. No deferred taxes existed at the beginning of 2023. 30% 30% Calculate the current and deferred tax expense or benefit for each of the four years. Also calculate the balance of the deferred tax balance sheet account at the end of each fiscal year from 2023 to 2026. (Show asset and benefit numbers as positive, and liability and expense numbers as negative.)
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