The information that follows pertains to Richards Refrigeration, Inc.:a. At December 31, 2021, temporary differences existed between the financial statement book values and the tax bases of thefollowing:Buildings and equipment (net of accumulated depreciation)Prepaid insuranceLiability-loss contingencyb. No temporary differences existed at the beginning of 2021.BookValue$160TaxBasis$110($ in millions)Future Taxable(Deductible)Amount$ 50707045(45)c. Pretax accounting income was $220 million and taxable income was $145 million for the year ended December 31, 2021. The taxrate is 25%.Required:1. Complete the following table given below and prepare the appropriate journal entry to record income taxes for 2021.2. What is the 2021 net income?Complete this question by entering your answers in the tabs below.Required 1CalculationRequired 1 GJ Required 2Complete the following table given below to record income taxes for 2021. (Enter your answers in millions rounded to 2 decimal places(i.e., 5,500,000 should be entered as 5.50). Negative amounts should be entered with a minus sign.)Pretax accounting incomePermanent differences($ in millions) X Tax Rate %$220.00Tax $Income subject to taxationTemporary DifferencesDepreciationPrepaid insurance220.00X=$0.00X=X=Liability - loss contingencyX=Income taxable in current year$220.00Required 1 CalculationRecorded as:Required 1 GJ >

Income tax payable:The tax amount that is due to the government or tax authority is called income…

Buildings and equipment (net of accumulated depreciation) Prepaid insurance Liability-loss contingency b. No temporary differences existed at the beginning of 2021. Book Tax Value Basis Future Taxable (Deductible) Amount $160 $110 70 0 $ 50 70 45 (45) c. Pretax accounting income was $220 million and taxable income was $145 million for the year ended December 31, 2021. The tax rate is 25%.

Buildings and equipment (net of accumulated depreciation) Prepaid insurance Liability-loss contingency b. No temporary differences existed at the beginning of 2021. Book Tax Value Basis Future Taxable (Deductible) Amount $160 $110 70 0 $ 50 70 45 (45) c. Pretax accounting income was $220 million and taxable income was $145 million for the year ended December 31, 2021. The tax rate is 25%.

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 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?
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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.
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