Williams Company reported pretax net income from continuing operations of $1,000,000 and taxable income of $600,000. The book-tax difference of $400,000 was due to a $150,000 favorable temporary difference relating to depreciation, an unfavorable temporary difference of $90,000 due to an increase in the Allowance for Uncollectible Accounts and a $160,000 favorable permanent difference including non-taxable interest income of $60,000 and $100,000 insurance proceeds from key man insurance. Reconcile the Company’s effective tax rate with its normal 21% tax rate.

Williams Company reported pretax net income from continuing operations of $1,000,000 and taxable income of $600,000. The book-tax difference of $400,000 was due to a $150,000 favorable temporary difference relating to depreciation, an unfavorable temporary difference of $90,000 due to an increase in the Allowance for Uncollectible Accounts and a $160,000 favorable permanent difference including non-taxable interest income of $60,000 and $100,000 insurance proceeds from key man insurance. Reconcile the Company’s effective tax rate with its normal 21% tax rate.

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter14: Taxes On The Financial Statements

Section: Chapter Questions

Problem 4BCRQ

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t ces Hafnaoui Company reported pretax net income from continuing operations of $1,168,000 and taxable income of $695,500. The book-tax difference of $472,500 was due to a $315,000 favorable temporary difference relating to depreciation, an unfavorable temporary difference of $126,000 due to an increase in the reserve for bad debts, and a $283,500 favorable permanent difference from the receipt of life insurance proceeds. At the end of the year, the reserve for bad debts had a balance of $157,500; the beginning balance in the account was $31,500. Hafnaoui's beginning book (tax) basis in its fixed assets was $1,046,000 ($869,000) and its ending book (tax) basis is $1,615,000 ($1,123,000). Problem 17-77 Part b (Algo) b. Compute Hafnaoui Company's deferred income tax expense or benefit. Note: Enter all numbers as a positive number and indicate whether a deferred tax expense or a deferred tax benefit.
Randolph Company reported pretax net income from continuing operations of $959,000 and taxable income of $590,000. The book–tax difference of $369,000 was due to a $205,000 favorable temporary difference relating to depreciation, an unfavorable temporary difference of $88,000 due to an increase in the reserve for bad debts, and a $252,000 favorable permanent difference from the receipt of life insurance proceeds. b. Compute Randolph Company’s deferred income tax expense or benefit. c. Compute Randolph Company’s effective tax rate.
Randolph Company reported pre-tax net income from continuing operations of $800,000 and taxable income of $500,000. The book-tax difference of $300,000 was due to a $200,000 favorable temporary difference relating to depreciation, an unfavorable temporary difference of $80,000 due to an increase in the reserve for bad debts, and $180,000 favorable difference from the receipt of life insurance proceeds. Randolph Company's applicable tax rate is 21%. permanent a. Compute Randolph Company's current income tax expense. b. Compute Randolph Company's deferred income tax expense or benefit. Also prepare the journal entries for a. and b. above.
Vala
Hafnaoui Company reported pretax net income from continuing operations of $1,104,000 and taxable income of $661,500. The book-tax difference of $442,500 was due to a $295,000 favorable temporary difference relating to depreciation, an unfavorable temporary difference of $118,000 due to an increase in the reserve for bad debts, and a $265,500 favorable permanent difference from the receipt of life insurance proceeds. At the end of the year, the reserve for bad debts had a balance of $147,500; the beginning balance in the account was $29,500. Hafnaoui's beginning book (tax) basis in its fixed assets was $1,038,000 ($857,000) and its ending book (tax) basis is $1,595,000 ($1,119,000). d. Provide a reconciliation of Hafnaoui Company's effective tax rate with its hypothetical tax rate of 21 percent. Note: Amounts to be deducted should be indicated by a minus sign. Round your percentages to 2 decimal places. ETR reconciliation (in $) Income tax expense at 21% Tax benefit from permanent…
Hafnaoui Company reported pretax net income from continuing operations of $912,000 and taxable income of $587,500. The book–tax difference of $352,500 was due to a $235,000 favorable temporary difference relating to depreciation, an unfavorable temporary difference of $94,000 due to an increase in the reserve for bad debts, and a $211,500 favorable permanent difference from the receipt of life insurance proceeds. At the end of the year, the reserve for bad debts had a balance of $117,500; the beginning balance in the account was $23,500. Hafnaoui's beginning book (tax) basis in its fixed assets was $1,014,000 ($821,000) and its ending book (tax) basis is $1,535,000 ($1,107,000). a. Compute Hafnaoui Company's current income tax expense. b. Compute Hafnaoui Company's deferred income tax expense or benefit. c. Compute Hafnaoui Company's effective tax rate. d. Provide a reconciliation of Hafnaoui Company's effective tax rate with its hypothetical tax rate of 21 percent.
DEF Co. reported taxable income of P8M in its income tax return for the 1st year of operations. The entity revealed the following temporary differences between financial income and taxable income for the year:Tax depreciation in excess of book depreciation, P800,000Accrual for product liability claim in excess of actual claim, P1,200,000Reported installment sales income in excess of taxable installment sales income, P2,600,000Income tax rate, 30%Compute for the deferred tax expense for the 1st year
For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Pretax accounting income Permanent difference Temporary Taxable income difference-depreciation $370,000 (15,000) 355,000 (19,100) $335,900 Tringali's tax rate is 25%. Assume that no estimated taxes have been paid. What should Tringali report as income tax payable for its first year of operations?
On December 31, DePaul Corporation had the following cumulative temporary differences associated with its operations: 1. Estimated warranty expense, $28 million temporary difference: expense recorded in the year of the sale; tax-deductible when paid (one-year warranty). 2. Depreciation expense, $108 million temporary difference: straight-line in the income statement; MACRS on the tax return. 3. Income from installment sales of properties, $60 million temporary difference: income recorded in the year of the sale; taxable when received equally over the next five years. 4. Rent revenue collected in advance, $28 million temporary difference; taxable in the year collected; recorded as income when the performance obligation is satisfied in the following year. Required: Assuming DePaul will show a single noncurrent net amount in its December 31 balance sheet, indicate that amount and whether it is a net deferred tax asset or liability. The tax rate is 25%. Note: Enter your answer in millions…
For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Pretax accounting income $ 210,000 Permanent difference (14,700 ) 195,300 Temporary difference-depreciation (20,200 ) Taxable income $ 175,100 Tringali's tax rate is 25%. Assume that no estimated taxes have been paid. What should Tringali report as its income tax expense for its first year of operations? $52,500. $48,825. $43,775. $5,050.
Lin Ltd. reported the following: Earnings (loss) Depreciation (assets have a cost of $360,000) CCA Non-deductible expenses Tax rate Taxable income Accounting earnings Permanent difference Accounting income subject to tax Temporary difference 1. What is the amount of the taxable income or loss in each year? (Negative amounts and deductible amounts should be indicated by a minus sign.) Taxable income 20X7 20x7 (first year of operations) $98,000 $45,000 $60,000 $18,000 20x8 30% 2008 $(166,000) $ 45,000 $ 70,000 $18,000 30%
Aa-6