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XYZ made four equal estimated tax payments totaling $360,000 ($90,000 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 $500,000. During 2022, XYZ determined its taxable income at the end of each of the four quarters as follows: Quarter-end First Second Third Cumulative taxable income (loss) $ 400,000 $ 1,100,000 $ 1,400,000 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. Comprehensive Problem 05-65 Part e (Static) 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.

XYZ made four equal estimated tax payments totaling $360,000 ($90,000 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 $500,000. During 2022, XYZ determined its taxable income at the end of each of the four quarters as follows: Quarter-end First Second Third Cumulative taxable income (loss) $ 400,000 $ 1,100,000 $ 1,400,000 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. Comprehensive Problem 05-65 Part e (Static) 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.

FINANCIAL ACCOUNTING
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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XYZ made four equal estimated tax payments totaling $360,000 ($90,000 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 $500,000. 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. Comprehensive Problem 05-65 Part e (Static) 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. Installment Cumulative taxable income (loss) $ 400,000 $ 1,100,000 $ 1,400,000 1st quarter 2nd quarter 3rd quarter 4th quarter (1) Required cumulative payment (per quarter) under prior year tax method $ $ $ $ (2) Estimated tax payment under annualized method 125,000 $ 250,000 $ 375,000 $ 500,000✔ 84,000 168,000 346,500✔ Answer is not complete. (3) Required payment based on current year tax liability (4) Required cumulative payment $ $ $ $ (5) Actual payments 90,000 180,000 270,000 360,000 33 Underpayment penalty No No Yes Yes 0000
Transcribed Image Text:XYZ made four equal estimated tax payments totaling $360,000 ($90,000 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 $500,000. 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. Comprehensive Problem 05-65 Part e (Static) 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. Installment Cumulative taxable income (loss) $ 400,000 $ 1,100,000 $ 1,400,000 1st quarter 2nd quarter 3rd quarter 4th quarter (1) Required cumulative payment (per quarter) under prior year tax method $ $ $ $ (2) Estimated tax payment under annualized method 125,000 $ 250,000 $ 375,000 $ 500,000✔ 84,000 168,000 346,500✔ Answer is not complete. (3) Required payment based on current year tax liability (4) Required cumulative payment $ $ $ $ (5) Actual payments 90,000 180,000 270,000 360,000 33 Underpayment penalty No No Yes Yes 0000
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