FINANCIAL AND MANAGERIAL ACCOUNTING 180
FINANCIAL AND MANAGERIAL ACCOUNTING 180
9th Edition
ISBN: 9781264216086
Author: Wild
Publisher: MCG
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Chapter 9, Problem 22E

a

To determine

Concept Introduction:

Income tax liabilities: Corporations are required to estimate their income tax liabilities when the financial statements are prepared because income tax expenses are based on earned income. Liability for tax expenses must be created and settled regularly.

The accounting adjustment to correct the ending balance in the income taxes payable account.

b

To determine

Concept Introduction:

Income tax liabilities: Corporations are required to estimate their income tax liabilities when the financial statements are prepared because income tax expenses are based on earned income. Liability for tax expenses must be created and settled regularly.

The journal entries to record adjustments to income tax and payment of tax of the fourth quarter.

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Financing Deficit Stevens Textile Corporation's 2019 financial statements are shown below: Just need the correct LOC? Balance Sheet as of December 31, 2019 (Thousands of Dollars) Cash $ 1,080   Accounts payable $ 4,320 Receivables 6,480   Accruals 2,880 Inventories 9,000   Line of credit 0    Total current assets $16,560   Notes payable 2,100 Net fixed assets 12,600      Total current liabilities $ 9,300       Mortgage bonds 3,500       Common stock 3,500       Retained earnings 12,860    Total assets $29,160      Total liabilities and equity $29,160 Income Statement for December 31, 2019 (Thousands of Dollars) Sales $36,000 Operating costs 34,000    Earnings before interest and taxes $ 2,000 Interest 160    Pre-tax earnings $ 1,840 Taxes (25%) 460 Net income $ 1,380 Dividends (40%) $    552 Addition to retained earnings $ 828 Stevens grew rapidly in 2019 and financed the growth with notes payable and long-term bonds. Stevens expects sales to…
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Chapter 9 Solutions

FINANCIAL AND MANAGERIAL ACCOUNTING 180

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