Times-Roman Publishing Company reports the following amounts in its first three years of operation: ($ in thousands) Subscription revenue recognized (earned) Subscription payments received in cash 2021 2022 2023 $220 $260 $210 260 240 250 The difference between pretax accounting income and taxable income is due to subscription revenue for one-year magazine subscriptions being reported for tax purposes in the year received, but reported in the income statement in later years when the performance obligation is satisfied. The income tax rate is 25% each year. Times-Roman anticipates profitable operations in the future. Required: 1. What is the balance sheet account that gives rise to a temporary difference in this situation? 2. Determine the amount of deferred subscription revenue at the end of each year. (Enter all amounts as positive values.) 3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax asset or a deferred tax liability? (Enter all amounts as positive values.)

Times-Roman Publishing Company reports the following amounts in its first three years of operation: ($ in thousands) Subscription revenue recognized (earned) Subscription payments received in cash 2021 2022 2023 $220 $260 $210 260 240 250 The difference between pretax accounting income and taxable income is due to subscription revenue for one-year magazine subscriptions being reported for tax purposes in the year received, but reported in the income statement in later years when the performance obligation is satisfied. The income tax rate is 25% each year. Times-Roman anticipates profitable operations in the future. Required: 1. What is the balance sheet account that gives rise to a temporary difference in this situation? 2. Determine the amount of deferred subscription revenue at the end of each year. (Enter all amounts as positive values.) 3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax asset or a deferred tax liability? (Enter all amounts as positive values.)

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 12P: Comprehensive Colt Company reports pretax financial income of 143,000 in 2019. In addition to pretax...

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In the current year, Madison Corporation had 50,000 of taxable income at a tax rate of 25%. During the year, Madison began offering warranties on its products and has a Warranty liability for financial reporting purposes of 5,000 at the end of the year. Warranty expenses are not deductible until paid for income tax purposes. Prepare the journal entry to record Madisons income taxes at the end of the year.
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Times-Roman Publishing Company reports the following amounts In its first three years of operation: ($ in thousands) Pretax accounting income Taxable income Req 2 and 3 The difference between pretax accounting Income and taxable income is due to subscription revenue for one-year magazine subscriptions being reported for tax purposes in the year received, but reported in the Income statement in later years when the performance obligation is satisfied. The Income tax rate is 25% each year. Times-Roman anticipates profitable operations in the future. Required: 1. What is the balance sheet account that gives rise to a temporary difference in this situation? 2. For each year, Indicate the cumulative amount of the temporary difference at year-end. 3. Determine the balance in the related deferred tax account at the end of each year. Is It a deferred tax asset or a deferred tax liability? Complete this question by entering your answers in the tabs below. 2624 $ 210 250 Cumulative temporary…
Vishal
Times-Roman Publishing Company reports the following amounts in its first three years of operation: ($ in 000s) 2016 2017 2018 $250 290 $240 $230 Pretax accounting income Taxable income 220 260 The difference between pretax accounting income and taxable income is due to subscription revenue for one-year magazine subscriptions being reported for tax purposes in the year received, but reported in the income statement in later years when earned. The income tax rate is 40% each year. Times-Roman anticipates profitable operations in the future. Required: 1. What is the balance sheet account for which a temporary difference is created by this situation? 2. For each year, indicate the cumulative amount of the temporary difference at year-end. 3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax asset or a deferred tax liability? 4. How should the deferred tax amount be classified and reported in the balance sheet?
Times-Roman Publishing Company reports the following amounts in its first three years of operation: ($ in thousands) 2021 2022 2023 Subscription revenue recognized (earned) $ 250 $ 240 $ 230 Subscription payments received in cash 290 220 260 The difference between pretax accounting income and taxable income is due to subscription revenue for one-year magazine subscriptions being reported for tax purposes in the year received, but reported in the income statement in later years when the performance obligation is satisfied. The income tax rate is 25% each year. Times-Roman anticipates profitable operations in the future. Required:1. What is the balance sheet account that gives rise to a temporary difference in this situation?2. Determine the amount of deferred subscription revenue at the end of each year. (Enter all amounts as positive values.)3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax…
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How do you get the answer? Times-Roman Publishing Company reports the following amounts in its first three years of operation: ($ in thousands) 2021 2022 2023 Subscription revenue recognized (earned) $ 310 $ 330 $ 290 Subscription payments received in cash 350 310 330 The difference between pretax accounting income and taxable income is due to subscription revenue for one-year magazine subscriptions being reported for tax purposes in the year received, but reported in the income statement in later years when the performance obligation is satisfied. The income tax rate is 25% each year. Times-Roman anticipates profitable operations in the future. Required:1. What is the balance sheet account that gives rise to a temporary difference in this situation?2. Determine the amount of deferred subscription revenue at the end of each year. (Enter all amounts as positive values.)3. Determine the balance in the related deferred tax account at the end of each…
Times-Roman Publishing Company reports the following amounts in its first three years of operation: ($ in thousands) 2021 2022 2023 Subscription revenue recognized (earned) $ 210 $ 220 $ 180 Subscription payments received in cash 250 200 200 The difference between pretax accounting income and taxable income is due to subscription revenue for one-year magazine subscriptions being reported for tax purposes in the year received, but reported in the income statement in later years when the performance obligation is satisfied. The income tax rate is 25% each year. Times-Roman anticipates profitable operations in the future. Required:1. What is the balance sheet account that gives rise to a temporary difference in this situation?2. Determine the amount of deferred subscription revenue at the end of each year. (Enter all amounts as positive values.)3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax…
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