The information that follows pertains to Esther Food Products:a. At December 31, 2018, temporary differences were associated with the following future taxable (deductible)amounts:Depreciation $ 60,000Prepaid expenses 17,000Warranty expenses (12,000)b. No temporary differences existed at the beginning of 2018.c. Pretax accounting income was $80,000 and taxable income was $15,000 for the year ended December 31,2018.d. The tax rate is 40%.Required:Determine the amounts necessary to record income taxes for 2018, and prepare the appropriate journal entry.

The information that follows pertains to Esther Food Products:a. At December 31, 2018, temporary differences were associated with the following future taxable (deductible)amounts:Depreciation $ 60,000Prepaid expenses 17,000Warranty expenses (12,000)b. No temporary differences existed at the beginning of 2018.c. Pretax accounting income was $80,000 and taxable income was $15,000 for the year ended December 31,2018.d. The tax rate is 40%.Required:Determine the amounts necessary to record income taxes for 2018, and prepare the appropriate journal entry.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 12P: Comprehensive Colt Company reports pretax financial income of 143,000 in 2019. In addition to pretax...

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Comprehensive Colt Company reports pretax financial income of 143,000 in 2019. In addition to pretax income from continuing operations (of which revenues are 295,000), the following items are included in this pretax income: Colts taxable income totals 93,000 in 2019. The difference between the pretax financial income and the taxable income is due to the excess of tax depreciation over financial depreciation on assets used in continuing operations. At the beginning of 2019, Colt had a retained earnings balance of 310.000 and a deferred tax liability of 8,100. During 2019, Colt declared and paid dividends of 48,000. It is subject to tax rates of 15% on the first 50,000 of income and 30% on income in excess of 50,000. Based on proper interperiod tax allocation procedures, Colt has determined that its 2019 ending deferred tax liability is 14,100. Required: 1. Prepare a schedule for Colt to allocate the total 2019 income tax expense to the various components of pretax income. 2. Prepare Colts income tax journal entry at the end of 2019. 3. Prepare Colts 2019 income statement. 4. Prepare Colts 2019 statement of retained earnings. 5. Show the related income tax disclosures on Colts December 31, 2019, balance sheet.
The information that follows pertains to Esther Food Products: a. At December 31, 2024, temporary differences were associated with the following future taxable (deductible) amounts: Depreciation Prepaid expenses Warranty expenses b. No temporary differences existed at the beginning of 2024. c. Pretax accounting income was $46,000 and taxable income was $9,000 for the year ended December 31, 2024. d. The tax rate is 25%. Required: Complete the following table given below and prepare the appropriate journal entry to record income taxes for 2024. Complete this question by entering your answers in the tabs below. Calculation General Journal $ 32,000 11,000 (6,000) Complete the following table given below to record income taxes for 2024. Note: Amounts to be deducted should be entered with a minus sign. Description Pretax accounting income Permanent differences Income subject to taxation Temporary Differences Income taxable in current year $ Amount 46,000 X Tax Rate = x X Recorded as:
E18-10 Multiple Temporary Differences Vickers Company reports taxable income of $4,500 for 2019. Vickers has two temporary differences between pretax financial income and taxable income at the end of 2019. The first difference is expected to result in taxable amounts totaling $2,470 in future years. The second difference is expected to result in deductible amounts totaling $1,360 in future years. Vickers has a deferred tax asset of $372 and a deferred tax liability of $690 at the beginning of 2019. The current tax rate is 30%, and no change in the tax rate has been enacted for future years. Vickers has positive, verifiable evidence of future taxable income. Required: Prepare Vickers’s income tax journal entry at the end of 2019.
The information that follows pertains to Esther Food Products: a. At December 31, 2024, temporary differences were associated with the following future taxable (deductible) amounts: Depreciation Prepaid expenses Warranty expenses $ 52,000 22,000 (19,000) b. No temporary differences existed at the beginning of 2024. c. Pretax accounting income was $74,000 and taxable income was $19,000 for the year ended December 31, 2024. d. The tax rate is 25%. Required: Complete the following table given below and prepare the appropriate journal entry to record income taxes for 2024. Complete this question by entering your answers in the tabs below. Calculation General Journal Complete the following table given below to record income taxes for 2024. Note: Amounts to be deducted should be entered with a minus sign. Description Pretax accounting income Permanent differences Income subject to taxation Temporary Differences Income taxable in current year Calculation General Journal Amount Tax Rate $…
The following information relates to Wildhorse Corp.: At July 1, 2019 At June 30, 2020 Temporary difference, giving rise to future taxable amounts $28,600 $79,800 Temporary difference, giving rise to future deductible amounts 18,700 54,800 Accounting income for the year ended June 30, 2020 was $70,200. No permanent differences existed during the fiscal year. The company was expected to operate profitably in the future. The tax rate was 20% for the current and future years. Wildhorse Corp. follows ASPE. Calculate the amount of taxable income for 2020. Taxable Income $ eTextbook and Media List of Accounts
The information that follows pertains to Richards Refrigeration, Incorporated: a. At December 31, 2024, temporary differences existed between the financial statement book values and the tax bases of the following: Buildings and equipment (net of accumulated depreciation) Prepaid insurance Liability-loss contingency b. No temporary differences existed at the beginning of 2024. ($ in millions) Book Value Tax Basis $ 120 $ 90 50 25 0 0 Future Taxable (Deductible) Amount $ 30 50 (25) c. Pretax accounting income was $200 million and taxable income was $145 million for the year ended December 31, 2024. The tax rate is 25%. Required: 1. Complete the following table given below and prepare the appropriate journal entry to record income taxes for 2024. 2. What is the 2024 net income?
E18-3 Temporary Difference At the end of 2019, its first year of operations, Slater Company reported a book value for its depreciable assets of $40,000 for financial reporting purposes and $33,000 for income tax purposes. Slater earned taxable income of $97,000 during 2019. The company is subject to a 30% income tax rate, and no change has been enacted for future years. The depreciation was the only temporary difference between taxable income and pretax financial income. Required: 1. Prepare Slater’s income tax journal entry at the end of 2019. 2. Show how the deferred taxes would be reported on Slater’s December 31, 2019, balance sheet.
For the year ended December 31, 2021, White Company reported pretax financial income of P5,000,000, while It’s taxable income amounts to P4,928,000. For the year 2021, the company’s book depreciation was P 268,000, while for tax purposes, the depreciation taken was P340,000. This temporary difference will reverse over the years 2022 through 2024 as follows: 2022-P28,000; 2023-P 25,000; 2024- P19,000. The enacted tax rates are as follows:2021: 30%2022: 32%2023: 34%2024: 36%How much deferred tax asset/deferred tax liability was reported by White Company on December 31, 2021? Choices: Deferred tax asset o P24,300 Deferred tax asset o P21,600 Deferred tax liability of P24,300 Deferred tax liability of P21,000
The following information relates to Crane Corp.: At July 1, 2022 At June 30, 2023 Temporary difference, giving rise to future taxable amounts Temporary difference, giving rise to future deductible amounts $28,000 $75,000 18,000 45,000 Accounting income for the year ended June 30, 2023 was $65,000. No permanent differences existed during the fiscal year. The company was expected to operate profitably in the future. The tax rate was 20% for the current and future years. Crane Corp. follows ASPE. (a) Calculate the amount of taxable income for 2023, Taxable Income for 2023 $
For the year ended December 31, 2021, White Company reported pretax financial income of P5,000,000, while It’s taxable income amounts to P4,928,000. For the year 2021, the company’s book depreciation was P 268,000, while for tax purposes, the depreciation taken was P340,000. This temporary difference will reverse over the years 2022 through 2024 as follows: 2022-P28,000; 2023-P 25,000; 2024- P19,000. The enacted tax rates are as follows: 2021: 30% 2022: 32% 2023: 34% 2024: 36% How much deferred tax asset/deferred tax liability was reported by White Company on December 31, 2021? Deferred tax asset o P24,300 Deferred tax asset o P21,600 Deferred tax liability of P24,300 Deferred tax liability of P21,000
For the year ended December 31, 2021, White Company reported pretax financial income of P5,000,000, while It’s taxable income amounts to P4,928,000. For the year 2021, the company’s book depreciation was P 268,000, while for tax purposes, the depreciation taken was P340,000. This temporary difference will reverse over the years 2022 through 2024 as follows: 2022-P28,000; 2023-P 25,000; 2024- P19,000. The enacted tax rates are as follows: 2021: 30% 2022: 32% 2023: 34% 2024: 36% How much deferred tax asset/deferred tax liability was reported by White Company on December 31, 2021?
The books of Chicharon Bulaklak Company for the year ended December 31, 2020 showed pretax income of P720,000. In computing the taxable income for income tax purposes, the following temporary differences were taken into account. Depreciation deducted for tax purposes in excess of depreciation recorded in the books- P32,000Income from installment sales reportable for tax purposes in excess of income recognized in the books- P24,000 What amount should Chicharon Bulaklak Company record as current income tax liability at December 31, 2020 assuming a corporate income tax rate of 30%.