Timpanogos Incorporated is an accrual-method, calendar-year corporation. For 2023, it reported financial statement income aftertaxes of $1,572,350. Timpanogos provided the following information relating to its activities for the year:Life insurance proceeds as a result of CEO's deathRevenue from sales (for both book and tax purposes)Premiums paid on the key-person life insurance policies. The policies have no cash surrender value.Charitable contributionsCost of goods sold for book and tax purposesInterest income on tax-exempt bondsInterest paid on loan obtained to purchase tax-exempt bondsRental income payments received and earned in 2023Rental income payments received in 2022 but earned in 2023Rental income payments received in 2023 but not earned by year-endTax depreciationBook DepreciationNet capital lossFederal income tax expense for booksRequired:$ 234,0002,340,00024,400210,600351,000a. Reconcile book income to taxable income for Timpanogos Incorporated. Be sure to start with book income and identify all of theadjustments necessary to arrive at taxable income.46,80052,65018,40011,70035,10063,50028,40048,800362,700

Workings ItemTaxableBook-Tax DifferenceExplanation1.Life Insurance Proceeds as a Result of CEO's…

Answered: Timpanogos Incorporated is an…

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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The Dakota Corporation had a 2021 taxable income of $20,000,000 from operations after all operating costs but before (1) interest charges of $3,800,000, (2) dividends received of $320,000, (3) dividends paid of $2,200,000, and (4) income taxes (the firm’s tax rate is 21 percent).a. Calculate Dakota’s income tax liability. (Round your answer to the nearest dollar amount.) With a marginal and average tax rate of 21% The income tax liability is NOT 3,469,200
Slime Corp. maintains its accounting records on the cash basis but restates it financial statements to accrual basis. Iniwan had P600,000 in cash basis pre-tax income for 2020. The following information pertains to Iniwan’s operations for the year ended December 31, 2019 and 2020: Accounts receivable: 2020- P400,000; 2019- P200,000 Accounts payable: 2020- P150,000; 2019- P300,000 Under accrual method, what is the income before taxes should Slime report in its December 31, 2020?
Heron Corporation, a calendar year, accrual basis taxpayer, provides the following information for this year and asks you to prepare Schedule M-1. Net income per books (after-tax) $239,700 Taxable income 195,000 Federal income tax liability 59,300 Interest income from tax-exempt bonds 5,000 Interest paid on loan incurred to purchase tax- 2,000 exempt bonds Life insurance proceeds received as a result of 100,000 death of Heron's president Premiums paid on policy on life of Heron's 4,500 president Excess of capital losses over capital gains 2,000 Retained earnings at beginning of year 375,000 Cash dividends paid 90,000 Tax depreciation in excess of book 7,500 depreciation
In the current year, Axle, Inc., a calendar year C corporation, has $6,000,000 of adjusted taxable income, $300,000 of business interest income, zero floor plan financing interest, and $2,900,000 of business interest expense. Axle has average gross receipts for the prior three-year period of $32,000,000. What is Axle's interest deduction for the year? Answer:
Lakeview, a calendar year C corporation, reports the following income and expenses in the current year: Income from operations $400,000 Expenses from operations $280,000 Dividends received (10% ownership) $30,000 On July 15t of the year, Lakeview made a cash contribution to a qualified charitable organization of $25,000 in cash (not included in any of the above items). What is Lakeview's charitable contribution deduction for the year? Answer: $ . The charitable contribution deduction for corporations is limited to 10% of their taxable income for the year computed without regard to the charitable contribution deduction, net operating loss or capital loss carrybacks, and dividends received deduction. In this course, we are not applying the changes under the CARES Act.
The Dakota Corporation had a 2021 taxable income of $21,000,000 from operations after all operating costs but before (1) interest charges of $3,900,000, (2) dividends received of $330,000. (3) dividends paid of $2,250,000, and (4) income taxes (the firm's tax rate is 21 percent). a. Calculate Dakota's income tax liability. (Round your answer to the nearest dollar amount.) Income tax liability I
Prime Corp. is an accrual basis, calendar year C corporation. Its current year reported book income before federal income taxes was $300,000, which included $17,000 corporate bond interest income. A $20,000 expense for term life insurance premiums on corporate officers was incurred. Prime was the policy owner and beneficiary. What was Prime's current year taxable income as reconciled on Prime's Schedule M-1, Reconciliation of Income (Loss) per Books With Income per Return, of Form 1120, U.S. Corporation Income Tax Return? A. $320,000 B. $300,000 C. $283,000 D. $280,000
XYZ made four equal estimated tax payments totaling $440,000 ($110,000 per quarter). For purposes of estimated tax liabilities, assume XYZ was in existence in 2021 and that in 2021 it reported a tax liability of $612,000. During 2022, XYZ determined its taxable income at the end of each of the four quarters as follows: Quarter-end First Second Third Finally, assume that XYZ is not a large corporation for purposes of estimated tax calculations. Note: Do not round intermediate calculations. Round your answers to the nearest dollar amount. Required: a. Compute XYZ's taxable income. b. Compute XYZ's income tax liability. e. Determine the quarters for which XYZ is subject to underpayment of estimated tax penalties. Note: Round "Annualization Factor" for Fourth quarter to 2 decimal places. Complete this question by e ering your answers in the tabs below. Required A Cumulative taxable income (loss) $ 470,000 $ 1,170,000 $1,699,700 Installment Determine the quarters for which XYZ is subject to…

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