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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 ring your answers in the tabs below. Cumulative taxable income (loss) $ 470,000 $ 1,170,000 $1,699,700 Required A Required B Required 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. Instaliment 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 153,000 $ 306,000 $ 459,000 612,000 98,700 197,400 (3) Required payment based on current year tax liability < Required B $ (4) Required cumulative payment 98,700 $ $ $ $ (5) Actual payments Required > Underpayment penalty 110,000 No 220,000 No 330,000 Yes 440,000 Yes

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 ring your answers in the tabs below. Cumulative taxable income (loss) $ 470,000 $ 1,170,000 $1,699,700 Required A Required B Required 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. Instaliment 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 153,000 $ 306,000 $ 459,000 612,000 98,700 197,400 (3) Required payment based on current year tax liability < Required B $ (4) Required cumulative payment 98,700 $ $ $ $ (5) Actual payments Required > Underpayment penalty 110,000 No 220,000 No 330,000 Yes 440,000 Yes

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 $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 underpayment of estimated tax penalties. Note: Round "Annualization Factor" for Fourth quarter to 2 decimal places. 1st quarter 2nd quarter 3rd quarter 4th quarter Required B Required E (1) Required cumulative payment (per quarter) under prior year tax method $ $ $ $ (2) Estimated tax payment under annualized method 153,000 $ 306,000 $ 459,000 612,000 98,700 197,400 (3) Required payment based on current year tax liability < Required B $ (4) Required cumulative payment 98,700 Required E $ $ $ $ (5) Actual payments Underpayment penalty 110,000 No 220,000 No 330,000 Yes 440,000 Yes
Transcribed Image Text: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 underpayment of estimated tax penalties. Note: Round "Annualization Factor" for Fourth quarter to 2 decimal places. 1st quarter 2nd quarter 3rd quarter 4th quarter Required B Required E (1) Required cumulative payment (per quarter) under prior year tax method $ $ $ $ (2) Estimated tax payment under annualized method 153,000 $ 306,000 $ 459,000 612,000 98,700 197,400 (3) Required payment based on current year tax liability < Required B $ (4) Required cumulative payment 98,700 Required E $ $ $ $ (5) Actual payments Underpayment penalty 110,000 No 220,000 No 330,000 Yes 440,000 Yes
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