Intermediate Accounting - Myaccountinglab - Pearson Etext Access Card Student Value Edition

1st Edition

ISBN: 9780134047430

Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella

Publisher: PEARSON

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Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue autho…

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Textbook Question

Chapter 17, Problem 17.12E

Net Operating Loss, Carryback. Phlash Photo Labs, Ltd. provided you the following information for the 3 years ended December 31.

Year	Income (Loss) before Tax	Tax Rate (%)
1	$120,000	34%
2	70,000	25
3	(280,000)	40

Required

a. Assuming no book-tax differences and no uncertainty regarding the realization of the tax benefits of the net operating loss carryforward, prepare the journal entry to record the tax expense for each of the 3 years presented. The company always elects the carryback/carryforward option. Future tax rates are expected to remain unchanged.
b. Prepare a partial income statement for Year 3.

Definition Definition Items on the balance sheet that are created when the tax paid is more than tax considered on the income statement. Deferred tax assets result from overpayment and advance payment of taxes. They are recorded on the assets side of the balance sheet. A deferred tax asset results in the reduction of a future tax payment and is beneficial to the company. It arises when the profit as per tax laws is more than the profit as per books of accounts.

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Chapter 17, Problem 17.11E

Chapter 17, Problem 17.13E

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Chapter 17 Solutions

Intermediate Accounting - Myaccountinglab - Pearson Etext Access Card Student Value Edition

Ch. 17 - Prob. 17.1Q Ch. 17 - When will income tax expense and income taxes...Ch. 17 - Will permanent differences cause the effective tax...Ch. 17 - When do permanent differences arise?Ch. 17 - How are deferred tax assets and deferred tax...Ch. 17 - Prob. 17.6Q Ch. 17 - Prob. 17.7Q Ch. 17 - Prob. 17.8Q Ch. 17 - Prob. 17.9Q Ch. 17 - How does a firm determine the need for a valuation...

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Solution Summary: The author explains the process of journalizing the transactions of an organization in a chronological order.

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Chapter 17 Solutions