E19.12 (LO 1) (Deferred Tax Asset) Callaway SA has a deferred tax asset account with a balance of €150,000 at the end of 2021 due to a single cumulative temporary difference of €375,000. At the end of 2022, this same temporary difference has increased to a cumulative amount of €500,000. Taxable income for 2022 is €850,000. The tax rate is 40% for all years.
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- E19.4 (LO 1, 2) (Three Differences, Compute Taxable Income, Entry for Taxes) Havaci SpA reports pretax financial income of €80,000 for 2022. The following items cause taxable income to be different than pretax financial income. 1. Depreciation on the tax return is greater than depreciation on the income statement by €16,000. 2. Rent collected on the tax return is greater than rent revenue reported on the income statement by €27,000. 3. Fines for pollution appear as an expense of €11,000 on the income statement. Havaci's tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2022. Instructions a. Compute taxable income and income taxes payable for 2022. b. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2022. c. Prepare the income tax expense section of the income statement for 2022, beginning with the line "Income before income…E18.1 (LO 1, 2) Excel (One Temporary Difference, Future Taxable Amounts, One Rate, No Beginning Deferred Taxes) South Carolina Corporation has one temporary difference at the end of 2025 that will reverse and cause taxable amounts of $55,000 in 2026, $60,000 in 2027, and $65,000 in 2028. South Carolina's pretax financial income for 2025 is $300,000, and the tax rate is 30% for all years. There are no deferred taxes at the beginning of 2025. Instructions a. Compute taxable income and income taxes payable for 2025. b. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2025. c. Prepare the income tax expense section of the income statement for 2025, beginning with the line "Income before income taxes."E19.5 (LO 1, 2) (Two Temporary Differences, One Rate, Beginning Deferred Taxes) The following facts relate to Alschuler plc. 1. Deferred tax liability, January 1, 2022, £40,000. 2. Deferred tax asset, January 1, 2022, £o. 3. Taxable income for 2022, £115,000. 4. Pretax financial income for 2022, £200,000. 5. Cumulative temporary difference at December 31, 2022, giving rise to future taxable amounts, £220,000. 6. Cumulative temporary difference at December 31, 2022, giving rise to future deductible amounts, £35,000. 7. Tax rate for all years, 40%. 8. The company is expected to operate profitably in the future. Instructions a. Compute income taxes payable for 2022. b. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2022. c. Prepare the income tax expense section of the income statement for 2022, beginning with the line "Income before income taxes."
- E18.19 (LO 1, 2, 4) (Two Temporary Differences, Multiple Rates, Future Taxable Income) Nadal Inc. has two temporary differences at the end of 2024. The first difference stems from installment sales, and the second one results from the accrual of a loss contingency. Nadal's accounting department has developed a schedule of future taxable and deductible amounts related to these temporary differences as follows. Taxable amounts 2025 2026 2027 2028 $40,000 $50,000 $60,000 $80,000 (15,000) (19,000) Deductible amounts $40,000 $35,000 $41,000 $80,000 As of the beginning of 2024, the enacted tax rate is 34% for 2024 and 2025, and 20% for 2026-2029. At the beginning of 2024, the company had no deferred income taxes on its balance sheet. Taxable income for 2024 is $500,000. Taxable income is expected in all future years. Instructions a. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2024. b. Indicate how deferred income taxes would be…E19.2 (LO 1) (Two Differences, No Beginning Deferred Taxes, Tracked through 2 Years) The following information is available for McKee plc for 2022. 1. Excess of tax depreciation over book depreciation, £40,00o. This £40,000 difference will reverse equally over the years 2023-2026. 2. Deferral, for book purposes, of £25,000 of rent received in advance. The rent will be recorded as revenue in 2023. 3. Pretax financial income, £350,000. There are no deferred taxes at the beginning of 2022. 4. Tax rate for all years, 40%. Instructions a. Compute taxable income for 2022. b. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2022. c. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2023, assuming taxable income of £325,000.Le Bron Corporation has the following information for 2021 taxable year: Quarter RCIT MCIT CWT First P200,000 P160,000 P40,000 Second 240,000 500,000 60,000 Third 500,000 150,000 80,000 Fourth 300,000 200,000 70,000 Additional information: Excess MCIT from 2020: P60,000 Excess tax credits from 2020: P20,000 1.) How much was the income tax payable for the first quarter? a. 200,000 b. 160,000 c. 120,000 d. 80,000 2.) How much was the income tax payable for the second quarter? a. 660,000 b. 460,000 c. 200,000 d. 160,000 3.) How much was the annual income tax payable? a. 1,260,000 b. 390,000 c. 230,000 d. 930,000
- E19.3 (LO 1, 2) (One Temporary Difference, Future Taxable Amounts, One Rate, Beginning Deferred Taxes) Brennan Corporation began 2022 with a $90,000 balance in the Deferred Tax Liability account. At the end of 2022, the related cumulative temporary difference amounts to $350,000, and it will reverse evenly over the next 2 years. Pretax accounting income for 2022 is $525,000, the tax rate for all years is 40%, and taxable income for 2022 is $400,000. Instructions a. Compute income taxes payable for 2022. b. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2022. c. Prepare the income tax expense section of the income statement for 2022, beginning with the line "Income before income taxes." ייBramble Company has the following two temporary differences between its income tax expense and income taxes payable. 2020 2021 2022 Pretax financial income $844,000 $884,000 $948,000 Excess depreciation expense on tax return (30,800 ) (40,000 ) (9,500 ) Excess warranty expense in financial income 19,300 9,900 8,400 Taxable income $832,500 $853,900 $946,900 The income tax rate for all years is 20%. (a) Assuming there were no temporary differences prior to 2020, prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020, 2021, and 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit 2020…Buffalo Company has the following two temporary differences between its income tax expense and income taxes payable. 2020 2021 2022 Pretax financial income $811,000 $932,000 $992,000 Excess depreciation expense on tax return (31,500 ) (39,100 ) (9,900 ) Excess warranty expense in financial income 19,900 9,800 8,300 Taxable income $799,400 $902,700 $990,400 The income tax rate for all years is 20%. (a) Your Answer Correct Answer (Used) Assuming there were no temporary differences prior to 2020, prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020, 2021, and 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit…
- At December 31, 2022, Blossom Corporation had a temporary difference (related to pensions) and reported a related deferred tax asset of $29,100 on its balance sheet. At December 31, 2023, Blossom has five temporary differences. An analysis reveals the following: Future (Taxable) Deductible Amounts emporary Difference 2024 2025 2026 oks; deductible when funded for tax purposes $29,100 $19,100 $10,000 earned for accounting purposes and when received for tax purposes 76,000 accounting purposes and recognized for tax purposes when paid alment sales when sold for book purposes, and as collected for tax purposes 24,000 (36,300) (36,300) (36,300) ting purposes, and CCA for tax purposes (90,300) (50,000) (40,000) $2,500 ($67,200) ($66,300) The enacted tax rate has been 30% for many years. In November 2023, the rate was changed to 28% for all periods after January 1, 2025. Assume that the company has income tax due of $180,000 on the 2023 tax return and that Blossom follows IFRS. (a) Indicate…At December 31, 2022, Ivanhoe Corporation had a temporary difference (related to pensions) and reported a related deferred tax asset of $32,700 on its balance sheet. At December 31, 2023, Ivanhoe has five temporary differences. An analysis reveals the following: Future (Taxable) Deductible Amounts emporary Difference oks; deductible when funded for tax purposes 2024 2025 2026 $32,700 $22,700 $10,000 earned for accounting purposes and when received for tax purposes 76,000 accounting purposes and recognized for tax purposes when paid alment sales when sold for book purposes, and as collected for tax purposes 24,000 (36,300) (36,300) (36,300) iting purposes, and CCA for tax purposes (90,300) (50,000) (40,000) $6,100 ($63,600) ($66,300) The enacted tax rate has been 30% for many years. In November 2023, the rate was changed to 28% for all periods after January 1, 2025. Assume that the company has income tax due of $180,000 on the 2023 tax return and that Ivanhoe follows IFRS. (a) Indicate…PT BCD has a deferred tax asset account with a balance of Rp300.000 at the end of 2018 due to a single cumulative temporary difference of Rp750.000. At the end of 2019, this same temporary difference has increased to a cumulative amount of Rp1.000.000. Taxable income for 2019 is Rp1.700.000. The tax rate is 40% for all years. Assuming it’s probable that 70% of the deferred tax asset will be realized, what amount will be reported on ABC’s statement of financial position for the deferred tax asset at December 31, 2019?