[Fact Pattern #1]Zeff Co. prepared the following reconciliation of its pretax financial statement income to taxableincome for the current year, its first year of operations:Pretax financial income$160,000Nontaxable interest received onmunicipal securitiesLong-term loss accrual in excess(5,000)of deductible amount10,000Depreciation in excess of financialstatement amount(25,000)Taxable income$140,000Zeff's tax rate is 40%.[1] ( Refers to Fact Pattern 1)In its current-year income statement, what amount should Zeff report as income tax expense –current portion?A. $52,000B. $56,000C. $62,000D. $64,000

Income tax is a liability of every individual toupee to the government on the basis of their taxable…

Zeff Co. prepared the following reconciliation of its pretax financial statement income to taxable income for the current year, its first year of operations: Pretax financial income $160,000 Nontaxable interest received on municipal securities Long-term loss accrual in excess of deductible amount (5,000) 10,000 Depreciation in excess of financial (25,000) $140,000 statement amount Taxable income Zeff's tax rate is 40%. [1] ( Refers to Fact Pattern 1) In its current-year income statement, what amount should Zeff report as income tax expense – current portion? A. $52,000 B. $56,000 C. $62,000 D. $64,000

Zeff Co. prepared the following reconciliation of its pretax financial statement income to taxable income for the current year, its first year of operations: Pretax financial income $160,000 Nontaxable interest received on municipal securities Long-term loss accrual in excess of deductible amount (5,000) 10,000 Depreciation in excess of financial (25,000) $140,000 statement amount Taxable income Zeff's tax rate is 40%. [1] ( Refers to Fact Pattern 1) In its current-year income statement, what amount should Zeff report as income tax expense – current portion? A. $52,000 B. $56,000 C. $62,000 D. $64,000

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter3: Taxes On The Financial Statements

Section: Chapter Questions

Problem 4BCRQ

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The "other income" section of A Company's Statement of Comprehensive Income contains P5,000 in interest income, P15,000 equity in B Co. earnings, and P25,000 gain on sale of available-for-sale securities. Assuming the sale of the securities increased the current portion of income tax expense by P10,000, determine the amount of A's reclassification adjustment to other comprehensive income.
DEF Co. reported taxable income of P8M in its income tax return for the 1st year of operations. The entity revealed the following temporary differences between financial income and taxable income for the year:Tax depreciation in excess of book depreciation, P800,000Accrual for product liability claim in excess of actual claim, P1,200,000Reported installment sales income in excess of taxable installment sales income, P2,600,000Income tax rate, 30%Compute for the deferred tax expense for the 1st year
E. An entity reported the following assets and liabilities at year-end: Carrying Amount Tax BaseProperty 10,000,000 7,000,000Plant and equipment 5,000,000 4,000,000Inventory 3,000,000 4,000,000Accounts receivable 2,500,000 3,000,000Liabilities 6,000,000 5,500,000The entity had made a provision for inventory obsolescence of P1,000,000. Further, an impairment loss against accounts receivable of P500,000 has been made. The tax rate is 25%.1. What amount should be reported as deferred tax liability?2. What amount should be reported as deferred tax asset?
An entity provided the following net of tax figures for the current year: Net income 7,700,000 Net remeasurement loss on defined benefit plan 300,000 Unrealized gain on FA@FVOCI 1,500,000 Reclassification adjustment for gain on sale of 250,000 FA@FVOCI included in the net income Share warrants outstanding 400,000 Cumulative effect of change in accounting 500,000 policy - credit Interest revenue 100,000 Equity in associate's earnings 300,000 Prior period error - underdepreciation 200,000 What is the comprehensive income for the current year? A. 8,650,000 B. 8,900,000 C. 8,950,000 D. 9,050,000
A Corporation provided the following information for the current year: Income from continuing operation 2,000,000Loss on credit risk of financial liability at FVPL 200,000Revaluation surplus 1,500,000Loss from discontinued operation 300,000Unrealized gain on financial asset – FVPL 900,000Net “remeasurement” gain on defined benefit plan during the year 400,000 Unrealized gain on equity investment – FVOCI 1,000,000Investment gain on debt investment – FVOCI 900,000Unrealized loss on future contract designated as a cashflow hedge 200,000Translation gain on foreign operation 300,000 [Q7]: Determine the total amount of (21) other comprehensive income and (22) comprehensive income for the current year.
15. Elf Company prepared the following reconciliations of its pretax financial statement income to taxable income for the year ended December 31, 2000, its first year of operations: Pretax financial income Nontaxable interest received P1,600,000 ( 50,000) Long-term loss accrual in excess of deductible amount 100,000 Depreciation in excess of financial statement income ( 250,000) P1400.000 Taxable income Assume the income tax is 32%, what amount should Elf report as income tax expense current portion of its 2000 income statement? (a) P416,000 (b) P448,000 (c) P496,000 (d) P512,000 B
A reconciliation of pretax financial statement income to taxable income is shown below for Fieval Industries for the year ended December 31, 2018, its first year of operations. The income tax rate is 40%. Pretax accounting income (income statement) $ 300,000 Interest revenue on municipal securities (15,000 ) Warranty expense in excess of deductible amount 25,000 Depreciation in excess of financial statement amount (70,000 ) Taxable income (tax return) $ 240,000 What amount(s) should Fieval report related to deferred income taxes in its 2018 balance sheet? A) deferred tax asset of $10,000 and deferred tax liability of $28,000. B) deferred tax liability of $18,000 C) deferred tax asset of $4,000 and deferred tax liability of $28,000. D) deferred tax liability of $24,000.
A reconciliation of pretax financial statement income to taxable income is shown below for Fieval Industries for the year ended December 31, 2018, its first year of operations. The income tax rate is 40%. Pretax accounting income (income statement) $ 300,000 Interest revenue on municipal securities (15,000 ) Warranty expense in excess of deductible amount 25,000 Depreciation in excess of financial statement amount (70,000 ) Taxable income (tax return) $ 240,000 What amount(s) should Fieval report related to deferred income taxes in its 2018 balance sheet?
Zeff Company prepared the following reconciliation for the · first year of operations: 1,600,000 Pretax financial income Nontaxable interest received Long-term loss accrual in excess of deductible amount Depreciation in excess of financial depreciation ( 50,000) 100,000 ( 250,000) 1,400,000 Taxable income (Tax rate is 30%) What amount should be reported as total income tax expense? a. 495,000 b. 480,000 c. 465,000 d. 420,000 What amount should be reported as deferred tax liability a. 90,000 b. 45,000 с. 75,000 d. 30,000 What amount should be reported as deferred tax asset? a. 30,000 b. 90,000 c. 45,000 d. 75,000
A reconciliation of pretax financial statement income to taxable income is shown below for See Shipping for the year ended December 31, 2018, its first year of operations. The income tax rate is 40%. Pretax accounting income (income statement) $ 600,000 Installment income taxable upon receipt next year (30,000 ) Warranty expense in excess of deductible amount 5,000 Tax depreciation in excess of income statement amount (20,000 ) Taxable income (tax return) $ 555,000 What amount should See report as a noncurrent item related to deferred income taxes in its 2018 balance sheet? A) Deferred income tax asset of $18,000. B) Deferred income tax liability of $20,000. C) Deferred income tax liability of $45,000. D) Deferred income tax liability of $18,000
An entity reported the following information during the first year of operations: Pretax financial income 9,000,000 Nontaxable interest received 1,000,000 Long-term loss accrual in excess of deductible amount 1,500,000 Tax depreciation in excess of financial depreciation 2,000,000 Income tax rate 30% What is the deferred tax liability at year-end?
The following information was extracted from the records of Jackson Ltd as at 30 June 2020.Asset (liability)Accounts receivableMotor vehiclesProvision for warrantyDeposits received in advanceCarrying amount$150 000165 000(12 000)(15 000)Tax base$175 000125 00000The depreciation rates for accounting and taxation are 15% p.a. and 25% p.a. respectively. Depositsare taxable when received, and warranty costs are deductible when paid. An allowance for doubtfuldebts of $25 000 has been raised against accounts receivable for accounting purposes, but such debtsare deductible only when written off as uncollectable.Required1. Calculate the temporary differences for Jackson Ltd as at 30 June 2020. Justify yourclassification of each difference as either a deductible temporary difference or a taxabletemporary difference.2. Prepare a deferred tax worksheet and the journal entry to record deferred tax for the yearended 30 June 2020 assuming no deferred items had been raised in prior years.