6 The long-term liabilities section of CPS Transportation's December 31, 2023, balance sheet Included the following: (FV of $1, PV of $1,FVA of $1, PVA of $1. FVAD of $1 and PVAD of $1)Note: Use appropriate factor(s) from the tables provided.a. A lease liability with 15 remaining lease payments of $10,000 each, due annually on January 1:Lease liabilityLess: current portionThe Incremental borrowing rate at the Inception of the lease was 11% and the lessor's Implicit rate, which was known by CPSTransportation, was 10%.b. A deferred Income tax liability due to a single temporary difference. The only difference between CPS Transportation's taxableIncome and pretax accounting Income is depreciation on a machine acquired on January 1, 2023, for $500,000. The machine'sestimated useful life is five years, with no salvage value. Depreciation is computed using the straight-line method for financialreporting purposes and the MACRS method for tax purposes. Depreciation expense for tax and financial reporting purposes for2024 through 2027 is as follows:Year2024202520262027$ 76,0612,394$ 73,667MACRSDepreciation$ 160,00080,00070,00060,000Straight-lineDepreciation$ 100,000100,000100,000100,000Difference$ 60,000(20,000)(30,000)(40,000)The enacted federal income tax rates are 20% for 2023 and 25% for 2024 through 2027. CPS had a deferred tax liability of$7,500 as of December 31, 2023. For the year ended December 31, 2024, CPS's Income before income taxes was $900,000.On July 1, 2024, CPS Transportation Issued $800,000 of 9% bonds. The bonds mature in 20 years, and Interest is payable eachJanuary 1 and July 1. The bonds were issued at a price to yield the Investors 10%. CPS records interest at the effective interestrate. Required:1. Determine CPS Transportation's Income tax expense and net Income for the year ended December 31, 2024.2. Determine CPS Transportation's Interest expense for the year ended December 31, 2024.3. Prepare the long-term liabilities section of CPS Transportation's December 31, 2024, balance sheet.Complete this question by entering your answers in the tabs below.Required 1 Required 2 Required 3Determine CPS Transportation's income tax expense and net income for the year ended December 31, 2024.Note: Enter your answers in whole dollars.CPS TRANSPORTATIONIncome Tax Expense and Net IncomeFor the Year Ended December 31, 2024Income before income taxesIncome tax expense:CurrentDeferredNet income$ 900,0000$ 900,000< Required 1Required 2 >

Interest is a amount which is paid by a borrower to the person from the money has been taken by him…

The long-term liabilities section of CPS Transportation's December 31, 2023, balance sheet Included the following: (FV of $1, PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) Note: Use appropriate factor(s) from the tables provided. a. A lease liability with 15 remaining lease payments of $10,000 each, due annually on January 1: Lease liability Less: current portion $ 76,061 2,394 $ 73,667 The Incremental borrowing rate at the Inception of the lease was 11% and the lessor's Implicit rate, which was known by CPS Transportation, was 10%

The long-term liabilities section of CPS Transportation's December 31, 2023, balance sheet Included the following: (FV of $1, PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) Note: Use appropriate factor(s) from the tables provided. a. A lease liability with 15 remaining lease payments of $10,000 each, due annually on January 1: Lease liability Less: current portion $ 76,061 2,394 $ 73,667 The Incremental borrowing rate at the Inception of the lease was 11% and the lessor's Implicit rate, which was known by CPS Transportation, was 10%

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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