The accounting income of Pharoah Corporation and its taxable income for the years 2023 to 2026 are as follows: Year Accounting Income Taxable Income Tax Rate 2023 $463,000 $302,000 25% 2024 425,000 301,000 30% 2025 401,000 309,000 30% 2026 465,000 651,000 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 $42,000 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. (a) 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.) Current tax expense 2023 2024 $ $ $ Deferred tax asset/(liability) $ $ $ Deferred tax (expense)/benefit $ $ $ 2025

The accounting income of Pharoah Corporation and its taxable income for the years 2023 to 2026 are as follows: Year Accounting Income Taxable Income Tax Rate 2023 $463,000 $302,000 25% 2024 425,000 301,000 30% 2025 401,000 309,000 30% 2026 465,000 651,000 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 $42,000 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. (a) 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.) Current tax expense 2023 2024 $ $ $ Deferred tax asset/(liability) $ $ $ Deferred tax (expense)/benefit $ $ $ 2025

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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Balance Sheet Presentation Thiel Company reports the following deferred tax items at the end of 2019: Deferred TaxItem # AccountBalance Related Asset or LiabilityCreating the Deferred Tax Item 1 $6,700 debit Current asset 2 7,200 credit Current liability 3 10,600 debit Noncurrent asset 4 15,500 credit Noncurrent liability Required: Show how the preceding deferred tax items are reported on Thiel's December 31, 2019, balance sheet. THIEL COMPANYBalance Sheet (Tax Items)December 31, 2019 Noncurrent Liabilities Deferred Tax asset or liability $
Mitchell Corporation prepared the following reconciliation for 2021, its first year of operations: Pretax financial income for 2021 :900,000 Tax exempt interest: (75,000) Originating Temporary difference:(225,000) Taxable income:600,000 The temporary difference will reverse evenly over the next two years at an enacted tax rate of 40%. The enacted tax rate for 2021 is 35% What amount should be reported in its 2011 income statement as the deferred portion of the income tax expense Select one: O A. $90,000 credit O B. $120,000 debit •O C. $105,000 credit O D. $90,000 debit
Carla Vista Corporation began 2025 with a $54,280 balance in the Deferred Tax Liability account. At the end of 2025, the related cumulative temporary difference amounts to $413,000, and it will reverse evenly over the next two years. Pretax accounting income for 2025 is $619,500 , the tax rate for all years is 20%, and taxable income for 2025 is $477,900. Compute income taxes payable for 2025
Operating income and tax rates for Carla Vista Company's first three years of operations were as follows: 2020 2021 2022 O Income $350000 ($950000) $1630000 Amount $190000 Assuming that Carla Vista Company opts only to carryforward its 2021 NOL, what is the amount of deferred tax asset or liability that Carla Vista Company would report on its December 31, 2021 balance sheet? $285000 $237500 Enacted tax rate $190000 25% 20% 30% Deferred tax asset or liability Deferred tax liability Deferred tax asset Deferred tax liability Deferred tax asset
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Blossom Corporation had the following tax information: Year Taxable Income Tax Rate Taxes Paid 2020 $389,000 31% $120,590 2021 311,000 30% 93,300 2022 398,100 30% 119,430 In 2023, Blossom suffered a net operating loss of $551,000, which it decided to carry back. The 2023 enacted tax rate is 25%. Prepare Blossom's entry to record the effect of the loss carryback. (List debit entry before credit entry. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit Income Tax Receivable 165300 165300
ABC Corporation prepared the following reconciliation for its first year of operations: Pretax financial income for 2020- P1,200,000 Tax exempt interest- P100,000 Taxable temporary difference - P300,000 The temporary difference will reverse evenly over the next two years at an enacted tax rate of 40%. The enacted tax rate for 2020 is 28%. What amount should be reported in its 2020 income statement as the current portion of its provision for income taxes?
The following information is taken from Brilliant Company’s 2020 financial records: Pretax accounting income- P1,500,000 Accrued warranty in excess of actual warranty expenditures- P24,500 Excess tax depreciation- P45,000 Taxable income- P1,479,500 The temporary differences were created entirely in 2020. The future deductible amount is expected to reverse in 2021 and the future taxable amount will reverse in equal amounts in the next three years. Tax rates are: 30% in 2020; 32% in 2021; 34% in 2022 and 35% in 2023. 1. How much should Brilliant Company report as deferred tax asset and deferred tax liability, respectively, at December 31, 2020? a. P7,350 and P14,400 b. P7,840 and P15,150 c. P7,840 and P14,400 d. P7,350 and P15,150
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