The financial statements of Dakar Corp. for a four-year period reflected the following pre - tax amounts: Statement of Profit and Loss (summarized) 20X4 20X5 20x6 20X7 Revenues $ 119, 000 $ 133, 000 $ 153, 000 $ 173,000 Expenses other than depreciation (81, 800) (93,800) (96, 800) (129,800) Depreciation expense (straight - line ) (10,450) (10,450) (10, 450) (10,450) Pre - tax accounting income $ 26,750 $ 28,750 $ 45, 750 $ 32, 750 Statement of Financial Position (partial) 20X4 20X5 20x6 20X7 Machine (four-year life, no residual value), at cost $ 41, 800 $ 41,800 $ 41,800 $ 41,800 Less: Accumulated depreciation (10,450) (20,450) (30, 450) (41,800) $ 31,350 $ 21,350 $ 11,350 $ 0 Dakar has a tax rate of 40% each year and claimed CCA for income tax purposes as follows: 20X4, $17,800; 20X5, $13, 800; 20X6, $6, 200; and 20X7, $4,000. There were no deferred income tax balances at 1 January 20X4. Required: For each year, calculate the deferred income tax balance on the statement of financial position at the end of the year, and also net income. (Negative amounts and deductible amounts should be indicated by a minus sign.)

The financial statements of Dakar Corp. for a four-year period reflected the following pre - tax amounts: Statement of Profit and Loss (summarized) 20X4 20X5 20x6 20X7 Revenues $ 119, 000 $ 133, 000 $ 153, 000 $ 173,000 Expenses other than depreciation (81, 800) (93,800) (96, 800) (129,800) Depreciation expense (straight - line ) (10,450) (10,450) (10, 450) (10,450) Pre - tax accounting income $ 26,750 $ 28,750 $ 45, 750 $ 32, 750 Statement of Financial Position (partial) 20X4 20X5 20x6 20X7 Machine (four-year life, no residual value), at cost $ 41, 800 $ 41,800 $ 41,800 $ 41,800 Less: Accumulated depreciation (10,450) (20,450) (30, 450) (41,800) $ 31,350 $ 21,350 $ 11,350 $ 0 Dakar has a tax rate of 40% each year and claimed CCA for income tax purposes as follows: 20X4, $17,800; 20X5, $13, 800; 20X6, $6, 200; and 20X7, $4,000. There were no deferred income tax balances at 1 January 20X4. Required: For each year, calculate the deferred income tax balance on the statement of financial position at the end of the year, and also net income. (Negative amounts and deductible amounts should be indicated by a minus sign.)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 5RE: Turnip Company purchased an asset at a cost of 10,000 with a 10-year life during the current year....

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