Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 16, Problem 16.11BE
Change in tax rate
• LO16–5
Superior Developers sells lots for residential development. When lots are sold, Superior recognizes income for financial reporting purposes in the year of the sale. For some lots, Superior recognizes income for tax purposes when collected. In the prior year, income recognized for financial reporting purposes for lots sold this way was $20 million, which would be collected equally over the next two years. The enacted tax rate was 40%. This year, a new tax law was enacted, revising the tax rate from 40% to 35% beginning next year. Calculate the amount by which Superior should reduce its
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Exhibit 19-6 Estate tax law changes
The Tax Cuts and Jobs Act of 2017 and the Economic Growth and Tax Relief Reconciliation Act of 2001
brought important and significant changes to the federal estate, gift, and generation-skipping transfer (GST)
taxes.
Estate
Highest
Exemption
Estate
Unified or
Тах
Gift
Credit
GST Tax
Exemption Amount ($
($ million) million)
Rate
Exemption
($ million) Notes
Tax
Year (%)
2001
55
0.675
0.675
0.675
2002
50
1.00
1.00
1.00
Estate tax exemption
raised to $1 million; top
estate tax cut to 50%.
2003
49
1.00
1.00
1.00
Top estate tax cut to 49%.
2004
48
1.00
1.50
1.50
Estate tax exemption
rises to $1.5 million; top
estate tax rate cut to 48%.
2005
47
1.00
1.50
1.50
Top estate tax cut to 47%.
2006
46
1.00
2.00
2.00
Exemption rises to $2
million; top rate declines
to 46%.
2007
45
1.00
2.00
2.000
Top rate declines to 45%.
2008
45
1.00
2.00
2.00
No change.
2009
45
1.00
3.50
3.50
Exemption rises to $3.5
million.
2010
1.00
Repeal
Repeal Estate tax completely
repealed.…
Sh15
vi.3
Chapter 16 Solutions
Intermediate Accounting
Ch. 16 - Prob. 16.1QCh. 16 - A deferred tax liability (or asset) is described...Ch. 16 - Prob. 16.3QCh. 16 - Prob. 16.4QCh. 16 - Temporary differences result in future taxable or...Ch. 16 - Identify three examples of differences with no...Ch. 16 - The income tax rate for Hudson Refinery has been...Ch. 16 - Suppose a tax reform bill is enacted that causes...Ch. 16 - A net operating loss occurs when tax-deductible...Ch. 16 - Prob. 16.10Q
Ch. 16 - Additional disclosures are required pertaining to...Ch. 16 - Additional disclosures are required pertaining to...Ch. 16 - Prob. 16.13QCh. 16 - Prob. 16.14QCh. 16 - IFRS and U.S. GAAP follow similar approaches to...Ch. 16 - Temporary difference LO161 A company reports...Ch. 16 - Prob. 16.2BECh. 16 - Temporary difference LO162 A company reports...Ch. 16 - Prob. 16.4BECh. 16 - Temporary difference; income tax payable given ...Ch. 16 - Valuation allowance LO162, LO163 At the end of...Ch. 16 - Valuation allowance LO162, LO163 VeriFone Systems...Ch. 16 - Temporary and permanent differences; determine...Ch. 16 - Calculate taxable income LO161, LO164 Shannon...Ch. 16 - Multiple tax rates LO165 J-Matt, Inc., had pretax...Ch. 16 - Change in tax rate LO165 Superior Developers...Ch. 16 - Net operating loss carryforward LO167 During its...Ch. 16 - Net operating loss carryback LO167 AirParts...Ch. 16 - Tax uncertainty LO169 First Bank has some...Ch. 16 - Intraperiod tax allocation LO1610 Southeast...Ch. 16 - Temporary difference; taxable income given LO161...Ch. 16 - Prob. 16.2ECh. 16 - Prob. 16.3ECh. 16 - Prob. 16.4ECh. 16 - Prob. 16.5ECh. 16 - Prob. 16.6ECh. 16 - Identify future taxable amounts and future...Ch. 16 - Calculate income tax amounts under various...Ch. 16 - Determine taxable income LO161, LO162 Eight...Ch. 16 - Prob. 16.10ECh. 16 - Deferred tax asset; income tax payable given;...Ch. 16 - Prob. 16.12ECh. 16 - Prob. 16.13ECh. 16 - Multiple differences LO164, LO166 For the year...Ch. 16 - Multiple t ax rates LO162, LO165 Allmond...Ch. 16 - Prob. 16.16ECh. 16 - Deferred taxes; change in tax rates LO161, LO165...Ch. 16 - Multiple temporary differences; record income...Ch. 16 - Multiple temporary differences; record income...Ch. 16 - Net operating loss carryforward LO167 During...Ch. 16 - Net operating loss carryback LO167 Wynn Sheet...Ch. 16 - Net operating loss carryback and carryforward ...Ch. 16 - Identifying income tax deferrals LO161, LO162,...Ch. 16 - Multiple temporary differences; balance sheet...Ch. 16 - Multiple tax rates LO161, LO164, LO165 Case...Ch. 16 - Prob. 16.26ECh. 16 - Balance sheet classification LO168 As of December...Ch. 16 - Concepts; terminology LO161 through LO168 Listed...Ch. 16 - Tax credit; uncertainty regarding sustainability ...Ch. 16 - Intraperiod tax allocation LO1610 The following...Ch. 16 - FASB codification research LO165, LO168, LO1610...Ch. 16 - Prob. 16.1PCh. 16 - Prob. 16.2PCh. 16 - Prob. 16.3PCh. 16 - Prob. 16.4PCh. 16 - Change in tax rate; record taxes for four years ...Ch. 16 - Multiple differences; temporary difference yet to...Ch. 16 - Multiple differences; calculate taxable income;...Ch. 16 - Multiple differences; taxable income given; two...Ch. 16 - Determine deferred tax assets and liabilities ...Ch. 16 - Prob. 16.10PCh. 16 - Prob. 16.11PCh. 16 - Prob. 16.12PCh. 16 - Prob. 16.13PCh. 16 - Prob. 16.1BYPCh. 16 - Prob. 16.2BYPCh. 16 - Integrating Case 163 Tax effects of accounting...Ch. 16 - Communication Case 164 Deferred taxes; changing...Ch. 16 - Prob. 16.5BYPCh. 16 - Research Case 166 Researching the way tax...Ch. 16 - Analysis Case 167 Reporting deferred taxes; Ford...Ch. 16 - Prob. 16.8BYPCh. 16 - Judgment Case 169 Analyzing the effect of deferred...Ch. 16 - Prob. 16.12BYPCh. 16 - Target Case LO16-1, LO16-2, LO16-4, LO16-8,...Ch. 16 - Prob. 1CCIFRS
Additional Business Textbook Solutions
Find more solutions based on key concepts
18. What is the calculation for return on assets (ROA)? Explain what ROA measures.
Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
Assume you are a CFO of a company that is attempting to race additional capital to finance an expansion of its ...
Financial Accounting, Student Value Edition (4th Edition)
Plantwide and Departmental Overhead Allocation; Activity-Based Costing; Segmented Income Statements Koontz Comp...
Introduction To Managerial Accounting
This year, Prewer Inc. received a 160,000 dividend on its investment consisting of 16 percent of the outstandin...
PRINCIPLES OF TAXATION F/BUS.+INVEST.
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Question 13 of 75 A taxpaver has some income leftover between their California AGI and their deductions - Will this amount impact the size of any capital loss carryover into future years? O No - Capital losses are unmodified until they are deducted entirely. O No - So long as the capital loss is deducted within the fifteen (15) years that is allowed, the rest of the return doesn't impact it Yes - The capital gains carryover amounts use the state AGI and deduction figures to lessen the amount of the available capital loss carryforward into future years. O No - The capital losses do not even impact the return, carrying over in full to only offset future gains. Nextarrow_forwardManjiarrow_forwardSee Attached 5-29arrow_forward
- subject; accountingarrow_forwardProblem 06-06 (Algo) [LO 6-5] Besito Company, a calendar year, cash basis taxpayer, leases lawn and garden equipment. During December, it received the following cash payments. To what extent does each payment represent current taxable income to Besito? Required: a. $1,092 repayment of a loan from an employee. Besito loaned $1,050 to the employee six months ago, and the employee repaid the loan with interest. b. $1,150 deposit from a customer who rented mechanical equipment. Besito must return the entire deposit when the customer returns the undamaged equipment. c. $11,100 short-term loan from a local bank. Besito gave the bank a written note to repay the loan in one year percent interest. d. $814 prepaid rent from the customer described in part (b). The rent is $11 per day for the 74-day period from December 17 through February 28. For all requirements, leave no cells blank - be certain to enter "0" wherever required. a. Taxable income b. Taxable income c. Taxable income d. Taxable…arrow_forwardProblem 16-8 (Algo) Multiple differences; taxable income given; two years; balance sheet classification; change in tax rate [LO16-1, 16-2, 16-3, 16-5, 16-6, 16-8] Skip to question [The following information applies to the questions displayed below.] Arndt, Inc. reported the following for 2021 and 2022 ($ in millions): 2021 2022 Revenues $ 936 $ 1,028 Expenses 792 848 Pretax accounting income (income statement) $ 144 $ 180 Taxable income (tax return) $ 108 $ 214 Tax rate: 25% Expenses each year include $54 million from a two-year casualty insurance policy purchased in 2021 for $108 million. The cost is tax deductible in 2021. Expenses include $2 million insurance premiums each year for life insurance on key executives. Arndt sells one-year subscriptions to a weekly journal. Subscription sales collected and taxable in 2021 and 2022 were $55 million and $71 million, respectively. Subscriptions included in 2021 and…arrow_forward
- Problem 16-8 (Algo) Multiple differences; taxable income given; two years; balance sheet classification; change in tax rate [LO16-1, 16-2, 16-3, 16-5, 16-6, 16-8] Skip to question [The following information applies to the questions displayed below.] Arndt, Inc. reported the following for 2021 and 2022 ($ in millions): 2021 2022 Revenues $ 936 $ 1,028 Expenses 792 848 Pretax accounting income (income statement) $ 144 $ 180 Taxable income (tax return) $ 108 $ 214 Tax rate: 25% Expenses each year include $54 million from a two-year casualty insurance policy purchased in 2021 for $108 million. The cost is tax deductible in 2021. Expenses include $2 million insurance premiums each year for life insurance on key executives. Arndt sells one-year subscriptions to a weekly journal. Subscription sales collected and taxable in 2021 and 2022 were $55 million and $71 million, respectively. Subscriptions included in 2021 and…arrow_forwardLO.2 Oak Corporation has the following general business credit carryovers. If the general business credit generated by activities during 2019 equals 36,000 and the total credit allowed during the current year is 60,000 (based on tax liability), what amounts of the current general business credit and carryovers are utilized against the 2019 income tax liability? What is the amount of unused credit carried forward to 2020?arrow_forwardLO.5 Beige Corporation has a fiscal year ending April 30. For the year ending April 30, 2018, Beige generated taxable income of 1,200,000. What is Beige Corporations tax liability for this period?arrow_forward
- Exercise 16-32 (Algo) Tax credit; uncertain tax position [LO16-9] Delta Catfish Company has taken a position in its tax return to claim a tax credit of $20 million (direct reduction in taxes payable) and has determined that its sustainability is "more likely than not,”" based on its technical merits. Delta has developed the probability table shown below of all possible material outcomes: Probability Table ($ in millions) Amount of the tax benefit that management expects to receive Percentage likelihood that the tax benefit will be sustained at this level $20 $20 $18 $6 $4 10% 20% 25% 20% 25% Delta's taxable income is $88 million for the year. Its effective tax rate is 25%. The tax credit would be a direct reduction in current taxes payable. Required: 1. At what amount would Delta measure the tax benefit in its income statement? 2. Prepare the appropriate journal entry for Delta to record its income taxes for the year.arrow_forwardProblem 17-32 (Algorithmic) (LO. 6) Wan's AGI last year was $274,000. Her Federal income tax came to $82,200, paid through both withholding and estimated payments. This year, her AGI will be $411,000, with a projected tax liability of $61,650, all to be paid through estimates. Wan wants to pay the least amount of tax during the year that does not incur a penalty. If required, round intermediate calculations to two decimal place and your final answer to the nearest dollar. a. Compute Wan's total estimated tax payments for this year. Under the current-year method: $ Under the prior-year method: b. Assume instead that Wan's AGI last year was $92,000 and resulted in a Federal income tax of $18,400. Determine her total estimated tax payments for this year. Under the current-year method: $ Under the prior-year method: $arrow_forwardF7 A certain state uses the following progressive tax rate for calculating individual income tax: 7 ht©2003-2022 International Academy of Science. All Rights Reserved. F8 0-10,000 3% 10,001 - 50,000 5% 50,001 - 100,000 5.5% Calculate the state income tax owed on a $90,000 per year salary. tax = $[?] Round your answer to the nearest whole dollar amount. F9 Income Range ($) h 8 9. prtsc F10 home F11 Progressive Tax Rate . F12 + 11. delete Enter Backspace Num Lock CE 9:07. 11/5/20 +1_arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
PFIN (with PFIN Online, 1 term (6 months) Printed...FinanceISBN:9781337117005Author:Randall Billingsley, Lawrence J. Gitman, Michael D. JoehnkPublisher:Cengage Learning
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT
PFIN (with PFIN Online, 1 term (6 months) Printed...
Finance
ISBN:9781337117005
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Depreciation -MACRS; Author: Ronald Moy, Ph.D., CFA, CFP;https://www.youtube.com/watch?v=jsf7NCnkAmk;License: Standard Youtube License