The following information relates to Crane Corp.: At July 1, 2022 At June 30, 2023 Temporary difference, giving rise to future taxable amounts Temporary difference, giving rise to future deductible amounts $28,000 $75,000 18,000 45,000 Accounting income for the year ended June 30, 2023 was $65,000. No permanent differences existed during the fiscal year. The company was expected to operate profitably in the future. The tax rate was 20% for the current and future years. Crane Corp. follows ASPE. (a) Calculate the amount of taxable income for 2023. Taxable come for 2022

The following information relates to Crane Corp.: At July 1, 2022 At June 30, 2023 Temporary difference, giving rise to future taxable amounts Temporary difference, giving rise to future deductible amounts $28,000 $75,000 18,000 45,000 Accounting income for the year ended June 30, 2023 was $65,000. No permanent differences existed during the fiscal year. The company was expected to operate profitably in the future. The tax rate was 20% for the current and future years. Crane Corp. follows ASPE. (a) Calculate the amount of taxable income for 2023. Taxable come for 2022

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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Use this information for parts A and B. In 2026, Goodfellas Company reported pretax GAAP income of $400,000. During 2026, Goodfellas had the following differences between GAAP and tax: Recognized $100,000 installment sale revenue under GAAP in 2026. This revenue will be recognized for tax purposes in equal amounts over the next four years. Recognized $50,000 of depreciation in 2026 for tax. Starting in 2027, GAAP depreciation is $10,000 per year for the next five years. Received $100,000 in unearned rent revenue in 2026. Rent will be earned in equal amounts in 2027 and 2028. The tax rate for 2026 is 30 percent and 20 percent thereafter. A) What journal entry does Goodfellas record for taxes in 2026?
The pretax financial income (or loss) figures for Shamrock Company are as follows. 2017 81,000 2018 (51,000 ) 2019 (35,000 ) 2020 111,000 2021 95,000 Pretax financial income (or loss) and taxable income (loss) were the same for all years involved. Assume a 25% tax rate for 2017 and a 20% tax rate for the remaining years.Prepare the journal entries for the years 2017 to 2021 to record income tax expense and the effects of the net operating loss carryforwards. All income and losses relate to normal operations. (In recording the benefits of a loss carryforward, assume that no valuation account is deemed necessary.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit 2017 enter an account title to record carryback enter a debit amount enter a…
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.) 2023 2024…
Book Sherrod, Incorporated, reported pretax accounting income of $82 million for 2024. The following information relates to differences between pretax accounting income and taxable income: a. Income from installment sales of properties included in pretax accounting income in 2024 exceeded that reported for tax purposes by $7 million. The installment receivable account at year-end 2024 had a balance of $8 million (representing portions of 2023 and 2024 installment sales), expected to be collected equally in 2025 and 2026. b. Sherrod was assessed a penalty of $3 million by the Environmental Protection Agency for violation of a federal law in 2024. The fine is to be paid in equal amounts in 2024 and 2025. c. Sherrod rents its operating facilities but owns one asset acquired in 2023 at a cost of $84 million. Depreciation is reported by the straight-line method, assuming a four-year useful life. On the tax return, deductions for depreciation will be more than straight- line depreciation the…
The following information relating to the year ending 30 June 2023 for Penrith Ltd has been obtained from the company's records. Profit for year before further adjustments and tax Retained earnings (1 July 2022) General reserve Revaluation surplus Interim dividend paid Development costs Share Capital $33 000 5 500 3 000 increase the general reserve by $1000 2 500 5 000 4. provide for an estimated tax expense and current tax liability of $7500 on 2022-23 profita 3 500 100 000 On 30 June 2023, the directors decided to: 1. recommend a final cash dividend of $7000, to be ratified by shareholders at the Annual General Meeting to be paid on 15 August 2023. 2. write off development costs 3.
Pretax financial income for Lake Inc. is $300,000, and itstaxable income is $100,000 for 2018. Its only temporarydifference at the end of the period relates to a $70,000 differencedue to excess depreciation for tax purposes. If thetax rate is 40% for all periods, compute the amount ofincome tax expense to report in 2018. No deferred incometaxes existed at the beginning of the year.
How much is the restated balance of AMSTERDAM's retained earnings account at January 1, 2021?
) Information for Kent Corp. for the year 2022: Reconciliation of pretax accounting income and taxable income: Pretax accounting income $ 180,000 Permanent differences (15,000 ) 165,000 Temporary difference-depreciation (12,000 ) Taxable income $ 153,000 The enacted tax rate was 30% for 2022 and thereafter. What would Kent's income tax expense be in the year 2022? A) $42,300. B) $45,900. C) $49,500. D) None of these answer choices are correct.
Assume that Peridot operates in an industry for which NOL carryback is allowed. In its first four years of operations Peridot reported the following operating income (loss) amounts: 2018 $ 176,000 2019 126,000 2020 (438,000 ) 2021 476,000 There were no other items affecting deferred income taxes in any year. In 2020, Peridot elected to carry back its operating loss. The enacted income tax rate was 25%. In its 2021 income statement, what amount should Peridot report as income tax expense?
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Skysong Corporation had the following tax information. Year Taxable Income Tax Rate Taxes Paid 2023 $276,000 35 % $96,600 2024 299,000 30 89,700 2025 368,000 30 110,400 In 2026, Skysong suffered a net operating loss of $441,600, which it elected to carryback. The 2026 enacted tax rate is 29%. Prepare Skysong'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 enter O for the amounts.) Account Titles and Explanation Debit Credit