INTERMEDIATE ACCOUNTING
3rd Edition
ISBN: 9780136946694
Author: GORDON
Publisher: RENT PEARS
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Question
Chapter 17, Problem 17.6BE
To determine
To prepare: A reconciliation of Company P’s statutory tax rate to its effective tax rate.
Given information:
Company P’s income before taxes is $410,000.
Tax rate is 35%.
Non-deductible fines are $60,000 included in income before taxes.
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Reconciling between Effective and Statutory Tax Rates
Baltimore Inc. reported pretax GAAP income of $72,000 in 2020. In analyzing differences between GAAP income and taxable income, the company determined that it had deducted $9,000 in
nondeductible fines and added $5,040 in tax-exempt municipal interest revenue to GAAP income. The statutory tax rate is 25%.
Prepare a reconciliation between Baltimore Inc.'s effective and statutory tax rates.
• Note: Round percentage to one decimal place (for example, enter 3.4 for 3.35%).
Percentage
Statutory tax rate
0 %
Tax-exempt income
0 %
Non-deductible expense
0 %
Effective taxX rate
0 %
Nalad Corp. provided the following data related to accounting and taxable income:
Pre-tax accounting income (financial statements)
Taxable income (tax return)
Income tax rate
20X8
$530,000
20X9
$505,000
305,000
730,000
38%
38%
There are no existing temporary differences other than those reflected in these data. There are no permanent differences.
Required:
1-a. How much tax expense would be reported in each year if the taxes payable method was used?
Tax Expense
20X8
20X9
1-b. What is the implied tax rate? (Round your answers to 1 decimal place.)
20X8
20X9
Implied tax rate
96
%
2-a. How much tax expense would be reported using comprehensive tax allocation (liability method).
Tax Expense
20X8
20X9
2-b. How much deferred income tax would be reported using comprehensive tax allocation (liability method).
Nalad Corp. provided the following data related to accounting and taxable income:
20X8
20X9
Pre-tax accounting income (financial statements)
Taxable income (tax return)
$510,000
295,000
40%
$495,000
710,000
40%
Income tax rate
There are no existing temporary differences other than those reflected in these data. There are no permanent differences.
Required:
1-a. How much tax expense would be reported in each year if the taxes payable method was used?
Tax Expense
20X8
20X9
1-b. What is the implied tax rate? (Round your answers to 1 decimal place.)
20X8
20X9
Implied tax rate
Chapter 17 Solutions
INTERMEDIATE ACCOUNTING
Ch. 17 - Prob. 17.1QCh. 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. 17.6QCh. 17 - Prob. 17.7QCh. 17 - Prob. 17.8QCh. 17 - Prob. 17.9QCh. 17 - How does a firm determine the need for a valuation...
Ch. 17 - Prob. 17.11QCh. 17 - Prob. 17.12QCh. 17 - Prob. 17.13QCh. 17 - How does an entity account for uncertain tax...Ch. 17 - Prob. 17.15QCh. 17 - Prob. 17.16QCh. 17 - Do U.S. GAAP and IFRS classify deferred tax...Ch. 17 - Prob. 17.18QCh. 17 - Prob. 17.1MCCh. 17 - Prob. 17.2MCCh. 17 - Prob. 17.3MCCh. 17 - Prob. 17.4MCCh. 17 - Prob. 17.5MCCh. 17 - Prob. 17.6MCCh. 17 - Prob. 17.7MCCh. 17 - Prob. 17.1BECh. 17 - Income Taxes Payable. Limmox Company has...Ch. 17 - Permanent Differences. Simmox Company's income...Ch. 17 - Permanent Differences. Plimmox Company's income...Ch. 17 - Permanent Differences, Reconciliation of Statutory...Ch. 17 - Prob. 17.6BECh. 17 - Prob. 17.7BECh. 17 - Prob. 17.8BECh. 17 - Prob. 17.9BECh. 17 - Prob. 17.10BECh. 17 - Temporary Differences, Deferred Tax Liability....Ch. 17 - Temporary Differences. Deferred Tax Asset....Ch. 17 - Temporary Differences, Deferred Tax Asset. Using...Ch. 17 - Prob. 17.14BECh. 17 - Realizability of Deferred Assets. Maves, Inc....Ch. 17 - Prob. 17.16BECh. 17 - Prob. 17.17BECh. 17 - Change in Tax Rates, IFRS. Use the same...Ch. 17 - Prob. 17.19BECh. 17 - Prob. 17.20BECh. 17 - Prob. 17.21BECh. 17 - Prob. 17.22BECh. 17 - Prob. 17.23BECh. 17 - Prob. 17.24BECh. 17 - Prob. 17.25BECh. 17 - Prob. 17.26BECh. 17 - Prob. 17.27BECh. 17 - Prob. 17.1ECh. 17 - Prob. 17.2ECh. 17 - Prob. 17.3ECh. 17 - Prob. 17.4ECh. 17 - Temporary Differences, Deferred Tax Assets and...Ch. 17 - Temporary Differences, Deferred Tax Assets and...Ch. 17 - Prob. 17.7ECh. 17 - Prob. 17.8ECh. 17 - Change in Tax Rates, Permanent Difference,...Ch. 17 - Prob. 17.10ECh. 17 - Prob. 17.11ECh. 17 - Net Operating Loss, Carryback. Phlash Photo Labs,...Ch. 17 - Net Operating Loss, Carryforward. Loggins Lumber...Ch. 17 - Prob. 17.14ECh. 17 - Prob. 17.15ECh. 17 - Net Operating Loss, Carryforward, Tax Rate Change....Ch. 17 - Prob. 17.17ECh. 17 - Prob. 17.18ECh. 17 - Prob. 17.19ECh. 17 - Prob. 17.20ECh. 17 - Uncertain Tax Positions. Lewis Eagle Corporation...Ch. 17 - Uncertain Tax Positions. Based on the information...Ch. 17 - Prob. 17.23ECh. 17 - Prob. 17.24ECh. 17 - Prob. 17.1PCh. 17 - Temporary Differences, Deferred Tax Liabilities,...Ch. 17 - Prob. 17.3PCh. 17 - Prob. 17.4PCh. 17 - Temporary Differences, Deferred Tax Liabilities,...Ch. 17 - Prob. 17.6PCh. 17 - Prob. 17.7PCh. 17 - Prob. 17.8PCh. 17 - Prob. 17.9PCh. 17 - Prob. 17.10PCh. 17 - Prob. 17.11PCh. 17 - Prob. 17.12PCh. 17 - Prob. 17.13PCh. 17 - Prob. 17.14PCh. 17 - Prob. 17.15PCh. 17 - Prob. 1JCCh. 17 - Prob. 1FSCCh. 17 - Prob. 1SSCCh. 17 - Prob. 2SSCCh. 17 - Scene 1: The concept of the deferred tax liability...Ch. 17 - Basis for Conclusions Case 2: Uncertain Tax...
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