The following information relates to the accounting income for Manitoba Uranium Enterprises (MUE) for the current year ended December 31. (Click the icon to view the information.) During the year, the company sold one of its machines with carrying value of $50,000 for proceeds of $40,000, resulting in an accounting loss of $10,000. This loss has been included in the pre-tax income figure of $860,000 shown above. For tax purposes, the proceeds from the disposal were removed from the undepreciated capital cost (UCC) of Class 8 assets. The deferred income tax liability account on January 1 had a credit balance of $130,000. This balance is entirely related to property, plant, and equipment (PPE). Required Prepare the journal entries to record income taxes for MUE. Information Accounting income before income taxes me for with the acted, $ 860,000 Depreciation and depletion expense 410,000 Capital cost allowance claimed 550,000 ed tax credit) Membership initiation fees (not deductible) 30,000 Loss on disposal of equipment-see additional information below 10,000 Income tax rate 35%
The following information relates to the accounting income for Manitoba Uranium Enterprises (MUE) for the current year ended December 31. (Click the icon to view the information.) During the year, the company sold one of its machines with carrying value of $50,000 for proceeds of $40,000, resulting in an accounting loss of $10,000. This loss has been included in the pre-tax income figure of $860,000 shown above. For tax purposes, the proceeds from the disposal were removed from the undepreciated capital cost (UCC) of Class 8 assets. The deferred income tax liability account on January 1 had a credit balance of $130,000. This balance is entirely related to property, plant, and equipment (PPE). Required Prepare the journal entries to record income taxes for MUE. Information Accounting income before income taxes me for with the acted, $ 860,000 Depreciation and depletion expense 410,000 Capital cost allowance claimed 550,000 ed tax credit) Membership initiation fees (not deductible) 30,000 Loss on disposal of equipment-see additional information below 10,000 Income tax rate 35%
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter2: Financial Statements, Cash Flow,and Taxes
Section: Chapter Questions
Problem 19P: The Bookbinder Company had 500,000 cumulative operating losses prior to the beginning of last year....
Related questions
Question
None
Transcribed Image Text:The following information relates to the accounting income for Manitoba Uranium Enterprises (MUE) for the current
year ended December 31.
(Click the icon to view the information.)
During the year, the company sold one of its machines with carrying value of $50,000 for proceeds of $40,000,
resulting in an accounting loss of $10,000. This loss has been included in the pre-tax income figure of $860,000 shown
above. For tax purposes, the proceeds from the disposal were removed from the undepreciated capital cost (UCC) of
Class 8 assets.
The deferred income tax liability account on January 1 had a credit balance of $130,000. This balance is entirely
related to property, plant, and equipment (PPE).
Required
Prepare the journal entries to record income taxes for MUE.
Information
Accounting income before income taxes
me for
with the
acted,
$
860,000
Depreciation and depletion expense
410,000
Capital cost allowance claimed
550,000
ed tax
credit)
Membership initiation fees (not deductible)
30,000
Loss on disposal of equipment-see additional information below
10,000
Income tax rate
35%
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT