[Fact Pattern #1]Zeff Co. prepared the following reconciliation of its pretax financial statement income to taxableincome for the current year, its first year of operations:Pretax financial income$160,000Nontaxable interest received onmunicipal securitiesLong-term loss accrual in excess(5,000)of deductible amount10,000Depreciation in excess of financialstatement amount(25,000)Taxable income$140,000Zeff's tax rate is 40%.[1] ( Refers to Fact Pattern 1)In its current-year income statement, what amount should Zeff report as income tax expense –current portion?A. $52,000B. $56,000C. $62,000D. $64,000

Income tax is a liability of every individual toupee to the government on the basis of their taxable…

Zeff Co. prepared the following reconciliation of its pretax financial statement income to taxable income for the current year, its first year of operations: Pretax financial income $160,000 Nontaxable interest received on municipal securities Long-term loss accrual in excess of deductible amount (5,000) 10,000 Depreciation in excess of financial (25,000) $140,000 statement amount Taxable income Zeff's tax rate is 40%. [1] ( Refers to Fact Pattern 1) In its current-year income statement, what amount should Zeff report as income tax expense – current portion? A. $52,000 B. $56,000 C. $62,000 D. $64,000

Zeff Co. prepared the following reconciliation of its pretax financial statement income to taxable income for the current year, its first year of operations: Pretax financial income $160,000 Nontaxable interest received on municipal securities Long-term loss accrual in excess of deductible amount (5,000) 10,000 Depreciation in excess of financial (25,000) $140,000 statement amount Taxable income Zeff's tax rate is 40%. [1] ( Refers to Fact Pattern 1) In its current-year income statement, what amount should Zeff report as income tax expense – current portion? A. $52,000 B. $56,000 C. $62,000 D. $64,000

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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Pretax accounting income is computed to be $117,000 after including the effects of the appropriate items from the following information: Depreciation taken for tax purposes $93,000 Depreciation taken for accounting 16,000 Contributions to the pension plan 22,000 Pension expense 18,000 Interest revenue on municipal bonds 7,600 Penalty for late payment of income taxes 12,000 Unearned revenue for deposits received in advance 33,000 Unrealized gain on available-for-sale securities 8,000 Fine assessed for pollution of a river 25,000 Using the setup below, compute taxable income Pretax accounting income 99,000 Depreciation difference Pension cost difference Interest revenue Penalty Unearned revenue Unrealized gain Fine Taxable income
For the year ended December 31, 2024, Fidelity Engineering reported pretax accounting income of $988,000. Selected information for 2024 from Fidelity's records follows: Interest income on municipal governmental bonds $ 44,000 Depreciation claimed on the 2024 tax return in excess of depreciation on the income statement Carrying amount of depreciable assets in excess of their tax basis at year-end Warranty expense reported on the income statement 68,000 112,000 32,000 Actual warranty expenditures in 2024 22,000 Fidelity's income tax rate is 25%. At January 1, 2024, Fidelity's records indicated balances of zero and $11,000 in its deferred tax asset and deferred tax liability accounts, respectively. Required: Determine the amounts necessary to record income taxes for 2024, and prepare the appropriate journal entry. What is Fidelity's 2024 net income?
The following is governed by an income tax rate of 25% . Depreciation rate is determined using MACRS A company is considering two alternatives Choice 1 : Amachine is purchased for 60,000. It is a 5 year property class. It will be used for 10 years after which it will have a salvage value of 15,000. It is mostly grey with a metallic steel cover. The Before Tax Cash Flow will be 80,000 per year. The machine is purchased from Retained Earning cash outright. It has no extra deductions associated with it. Choice 2: A machine is purchased for 65,000. It is a 10 year property class object. It will be used for 12 years with a salvage value of 18,000. It is mostly blue with a white cover. The Before Tax Cash Flow will be 86,000 per year. The machine is purchased from Retained Earnings Cash Outright. It receives an additional allowance for environmental effects of 5000/yr. The allowance is not taxed. and is not included in the 86,000 BTCF.
A comparative income statement is given below for McKenzie Sales, Limited, of Toronto: McKenzie Sales, Limited Comparative Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses: Selling expenses Administrative expenses Total expenses Net operating income Interest expense Net income before taxes This Year $ 7,350,000 4,610,000 2,740,000 1,390,000 706,000 2,096,000 644,000 101,000 $ 543,000 Last Year $ 5,586,000 3,511,500 2,074,500 1,079,500 613,500 1,693,000 381,500 87,000 $ 294,500 Members of the company's board of directors are surprised to see that net income increased by only $248,500 when sales increased by $1,764,000. Required: 1. Express each year's income statement in common-size percentages. (Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)
For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Pretax accounting income $ 280,000 Permanent difference (15,600 ) 264,400 Temporary difference-depreciation (20,900 ) Taxable income $ 243,500 Tringali's tax rate is 25%. Assume that no estimated taxes have been paid. What should Tringali report as its deferred income tax liability as of the end of its first year of operations?
Haresh G
St. George, Incorporated reported $711,800 net income before tax on this year’sfinancial statement prepared in accordance with GAAP. The corporation’s recordsreveal the following information:Four years ago, St. George realized a $283,400 gain on the sale of investmentproperty and elected the installment sale method to report the sale for taxpurposes. Its gross profit percentage is 50.12, and it collected $62,000 principaland $14,680 interest on the installment note this year.Five years ago, St. George purchased investment property for $465,000 cash froman LLC. Because St. George and the LLC were related parties, the LLC’s $12,700realized loss on the sale was disallowed for tax purposes. This year, St. George soldthe property to an unrelated purchaser for $500,000.A flood destroyed several antique carpets that decorated the floors of corporateheadquarters. Unfortunately, St. George’s property insurance does not coverdamage caused by rising water, so the loss was uninsured. The carpets’…
The profit before tax, as reported in the Statement of Profit or Loss and Other Comprehensive Income of Oliver Ltd for the year ended 30 June 2021, amounted to $40,000 including the following revenue and expense items. June 2021 $ Interest revenue 4,500 Bad debts expense 6,000 Depreciation expense - plant 7,000 Annual Leave Expense 2,500 Rent Expense 2,000 Fines and Penalties (non-deductible) 500 Government grant (exempt from tax) 9,000 Additional information: а. The deduction for depreciation for tax purposes was $8,000. b. Bad debts written off for the year were $5,500. С. Interest revenue is receivable in advance and is taxed when received. Total cash receipts for interests were $8,500 during the year. d. The annual leave provision was $3,000 the end of the year (the opening balance was $2,000). е. Rent payments of $3,000 were made during the year. f. The tax rate is 30%. Required Prepare the current tax worksheet and the journal entry to recognise current tax at 30 June 2021.
Nirvana Corporation reports pretax financial income of $260,000 for 2022. The following items cause taxable income to be different than pretax financial income. Rental income on the 2022 tax return is $65,000 greater than on the income statement. Depreciation expense on the tax return is greater than depreciation on the income statement by $40,000. Interest on an investment in a municipal bond of $6,500 is reported on the income statement. Nirvana's tax rate is 25% for all years. There are no deferred taxes at the beginning of 2022. The company expects to realize only 40% of the benefit of any deferred tax assets. The fiscal year ends December 31, 2022. Required: 1. Prepare the journal entries to record i) income tax expense, income taxes payable, and deferred income taxes for 2022, and ii) any valuation allowance needed. 2. Indicate clearly what would be reported on the income statement beginning with income before income taxes for the year ended December 31, 2022 from just…
Book taxable income for the year after taxes was $352,103, which includes the dividend income. Book federal income tax expense for the year was $93,597 Tax depreciation deduction exceeded book depreciation by $25,000. The corporation deducted from its book income $5,000 in entertainment-related expenses. The corporation paid a $4,000 government fine that was deducted from its book income. The corporation claimed a book deduction of $12,500 for allowance for doubtful accounts for receivables generated this year. It wrote-off $8,000 in receivables from prior years that were deemed uncollectible. Geo-Jack received a total of $30,000 in taxable dividends and deducted $21,500 for taxes as a dividends received deduction. Assume the amount of dividend income for book is the same as the amount of dividend income for tax. prepare Geo Jack's M-1 based on the following information
For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Pretax accounting income $ 300,000 Permanent difference (15,000 ) 285,000 Temporary difference-depreciation (20,000 ) Taxable income $ 265,000 Tringali's tax rate is 25%. Assume that no estimated taxes have been paid. What should Tringali report as its deferred income tax liability as of the end of its first year of operations?