Sh9Please help meSolutionThankyou. Food, Inc. reported pretax bookincome of $4,000,000 in 2019, itsfirst year of operations. During thecurrent year, the reserve for baddebts increased by $ 100,000. Inaddition, tax depreciationexceeded book depreciation by $300,000. For financial statementpurposes, Food deducted the $90,000, the amount paid for lifeinsurance premiums for itsofficers. Finally, the Companyreceived $80,000 of tax-exemptmunicipal bond interest.What items listed above wouldrepresent temporary differencesfor income tax purposes?What would be Food's currentyear Income Tax Expense?Prepare the journal entry torecord income taxes for 2019.

Temporary differences for income tax purposes are created when an item is recognized differently for…

Answered: Food, Inc. reported pretax book income…

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 49P

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Cadbury Co. began operations in 2020. The following data relates to Cadbury ’s 2020 operations: Pretax financial income is $1,000,000. The tax rate is 21%. Cadbury estimates bad debt expense on 2020 accounts receivable was $35,000. Tax does not deduct the bad debts until an accounts receivable is determined to be uncollectible. Machinery was acquired in January for $500,000. Tax depreciation exceeds GAAP depreciation by 100,000. Interest received on tax-exempt FloridaState bonds was $30,000. Prepare the journal entry to record income tax payable, income tax expense, and any deferred taxes for 2020. Date Account Debit Credit
Foster Company reported pretax financial income of $350,000 for 2021. Foster uses an accelerated form of depreciation for tax purposes, and it exceeds book depreciation by $50,000. The tax rate for 2021 is 20%. Record the journal entry at the end of 2021, be sure to include calculations, as well as income tax expense, a deferred account, and income tax payable.
The following information is for Apple Co. for 2019:1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $900,000. This difference will reverse in equal amounts of $225,000 over the years 2020–2023.2. Interest received on governmental bonds was $75,000. 3. Rent collected in advance on January 1, 2019, totaled $450,000 for a 3-year period. Of this amount, $300,000 was reported as unearned at December 31 for book purposes. 4. The tax rates are 40% for 2019 and 35% for 2020 and subsequent years. 5. Income taxes of $2,400,000 are due per the tax return for 2019. 6. No deferred taxes existed at the beginning of 2019. Required:a. Compute the taxable income for 2019!b. Compute pretax financial income for 2019!c. Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2019 and 2020. Assume taxable income was $7,350,000 in 2020!
Lolo Inc. had pre-tax accounting income of P900,000 in 2020, its first year of operations. During 2020 the company had the following transactions: • Received rent from Mama, Co. for year 2021- P32,000 • Government bonds interest income- P40,000 • Depreciation for tax purposes in excess of book depreciation- • Installment sales revenue to be collected in 2021-P54,000 . P20,000 At the end of 2020, which of the following deferred tax accounts and balances is reported on Papa, Inc.'s statement of financial position? (assume income tax rate of 40%) A.Deferred tax liability- P20,800B.Deferred tax liability- P12.800C.Deferred tax asset- P12,800D.Deferred tax asset- P20,800
At the end of 2021, of accounts receivable of $100,000, a reserve for tax purposes of $27151 was deducted, During 2022 year, $3239 of accounts receivable were actually written off. At the end of 2022, the company expected 59755 to be uncollectible and deducted that amount as a reserve for tax purposes. Determine the nef effect of the reserve for doubtful debts.
For calendar 2020, Marvel Corporation, Inc., reported depreciation expense of $900,000 on its income statement, but on its 2020 income tax return, Marvel claimed CCA of $1,200,000. The 2020 balance sheet also included $150,000 in accrued warranty liability that will be deducted for tax purposes when paid. Marvel's income tax rates (known at December 31, 2020) are 30% for 2020 and 2021, and 24% for 2022 and 2023. The depreciation difference and warranty liability will reverse over the next three years as follows: Depreciation Difference Warranty Costs 2021 $ 60,000 $ 70,000 2022 140,000 50,000 2023 100,000 30,000 $ 300,000 $150,000 These were Marvel's only reversible (timing) differences. At December 31, 2020, Marvel’s deferred tax liability should be Select one: a. $67,800. b. $35,400. c. $75,000. d. $133,800. e. None of the above AMOUNTS.
V Company's records provided the following information for 2019: decrease in accounts payable, $4,500 loss on sale of land, $1,500 increase in inventory, $7,700 increase in income taxes payable, $2,300 net income, $66,300 patent amortization expense, $1,900 ordinary loss, $6,900 decrease in deferred taxes payable, $2,600 amortization of discount on bonds payable, $1,400 payment of cash dividends, $25,000 depletion expense, $5,200 decrease in salaries payable, $1,600 decrease in accounts receivable, $3,100 gain on sale of equipment, $6,000 proceeds from issuance of stock, $55,000 ordinary gain, $3,300 depreciation expense, $12,000 amortization of discount on investment in bonds, $1,000 Required Prepare the operating activities section of V's 2019 statement of cash flows using the indirect method. Use a minus sign to indicate cash outflows or decreases in cash. V COMPANY Statement of Cash Flows (Partial) For Year Ended December 31, 2019 Operating Activities: $fill…
Shenron, Inc. had pre-tax accounting income of P1,350,000 and a tax rate of 40% in 2020, its first year of operations. During 2020 the company had the following transactions: Received rent from Master, Co. for 2021 P48,000 Municipal bond income P60,000 Depreciation for tax purposes in excess of book depreciation P30,000 Installment sales revenue to be collected in 2021 P81,000 For 2020 what is the amount of income taxes payable for Shenron, Inc? a. P579,600 b. P452,400 c. P514,800 d. P490,800
On January 1, 2019, Carson Inc sold used equipment with a cost of S15,000 and a carryingamount of $2,500 to Disc Corp. in exchange for a $5,000, three-year non-interest-bearing notereceivable. Aitocs Inc. typically borrows funds at a rate of 10%, while Bathgate Corp. has variouslines of credit at 9%. Assume that Carson follows IFRS.Required:Prepare all journal entries related to the transaction in 2019, 2020, and 2021 for Aitocs Inc.(Show your calcuations)
Oriole Co. at the end of 2021, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income $ 690,000 Estimated warranty expenses deductible for taxes when paid 1,140,000 (1,632,000) $ 198,000 Extra depreciation Taxable income Estimated warranty expense of $830,000 will be deductible in 2022, $240,000 in 2023, and $70,000 in 2024. The use of the depreciable assets will result in taxable amounts of $544,000 in each of the next three years. Prepare a table of future taxable and deductible amounts. 2022 Future taxable(deductible) amounts Warranties Excess Depreciation Date 2023 Account Titles 2024 Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2021. Assuming an income tax rate of 30% for all years. TOTAL Debit Credit
The following information is available for Marigold Corporation for 2020. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $114,000. This difference will reverse in equal amounts of $28,500 over the years 2021-2024. Interest received on municipal bonds was $10,200. Rent collected in advance on January 1, 2020, totaled $61,800 for a 3-year period. Of this amount, $41.200 was reported as unearned at December 31, 2020, for book purposes. 1. 2. 3. 5. 6. The tax rates are 40% for 2020 and 35% for 2021 and subsequent years. Income taxes of $308,000 are due per the tax return for 2020. No deferred taxes existed at the beginning of 2020. ? Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2020 and 2021. Assume taxable income was $1,065,000 in 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry"…
On January 1, 2020, Sunland Company, a calendar-year company, issued $897000 of notes payable, of which $224250 is due on January 1 for each of the next four years. Ignoring interest, the proper balance sheet presentation on December 31, 2020, is O Current Liabilities, $448500; Long-term Debt, $448500. O Long-term Debt, $897000. O Current Liabilities, $224250; Long-term Debt, S672750. O Current Liabilities, $897000.

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