The following information is for Apple Co. for 2019: 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $900,000. This difference will reverse in equal amounts of $225,000 over the years 2020–2023. 2. Interest received on governmental bonds was $75,000. 3. Rent collected in advance on January 1, 2019, totaled $450,000 for a 3-year period. Of this amount, $300,000 was reported as unearned at December 31 for book purposes. 4. The tax rates are 40% for 2019 and 35% for 2020 and subsequent years. 5. Income taxes of $2,400,000 are due per the tax return for 2019. 6. No deferred taxes existed at the beginning of 2019. Required: a. Compute the taxable income for 2019! b. Compute pretax financial income for 2019! c. Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2019 and 2020. Assume taxable income was $7,350,000 in 2020!
The following information is for Apple Co. for 2019:
1.
2. Interest received on governmental bonds was $75,000.
3. Rent collected in advance on January 1, 2019, totaled $450,000 for a 3-year period. Of this amount, $300,000 was reported as unearned at December 31 for book purposes.
4. The tax rates are 40% for 2019 and 35% for 2020 and subsequent years.
5. Income taxes of $2,400,000 are due per the tax return for 2019.
6. No
Required:
a. Compute the taxable income for 2019!
b. Compute pretax financial income for 2019!
c. Prepare the
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
