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Part 1: During 2020 Big Time Consulting collected a $30,000 revenue in advance. It is unearned for GAAP, but included in income for tax. Accounting income before-tax was $250,000. The
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- Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and taxable income for 2020. The prior period adjustment was the result of an error in calculating bad debt expense for 2019. The current tax rate is 30%, and no change in the tax rate has been enacted for future years. When the company applies intraperiod income tax allocation, the prior period adjustment will be shown on the: a. income statement at 12,000 b. income statement at 8,400 (net of 3,600 income taxes) c. retained earnings statement at 12,000 d. retained earnings statement at 8,400 (net of 3,600 income taxes)1. Prepare journal entries to record the income tax and 2. Present the income tax expense in the income statement Problem 16-3 (ACP) In 2021, Argentina Company received an advance payment of P1,000,000, which was subject to tax but not reported in accounting income until 2022. The income statement and tax return showed the following: 2021 2022 Income before tax per income statement Income before tax per tax return Income tax rate 6,000,000 7,000,000 9,000,000 8,000,000 25% 25% Required: 1. Prepare journal entries to record the income tax a deferred tax for 2021 and 2022. for 2021 and 2022.At the beginning of 2021, Pitman Co. had pretax financial income of $1,200,000. Additionally, there was a timing difference of $300,000 due to an accounts receivable that will not be collected until the following year. The tax rate us 30%. A. Calculate the total taxable income for 2021. B. Calculate Income tax expense, income tax payable, and the deferred amount for 2021, and create the journal entry.
- Bridgeport Inc. reports the following pre-tax incomes (losses) for both financial reporting purposes and tax purposes: Year 2018 2019 2020 2021 (a) Accounting Income 2019 (Loss) $131.000 2020 2021 97,000 (306,000) 223.000 The tax rates listed were all enacted by the beginning of 2018. Bridgeport reports under the ASPE future/deferred income taxes method. 2018 Deferred Tax Expense Tax Rate 25 % Prepare the journal entries for each of the years 2018 to 2021 to record income tax. Assume the tax loss is first carried back, and that at the end of 2020, the loss carryforward benefits are judged more likely than not to be realized in the future. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts) de 25 % 30 % 30 % Prepare the journal entries for each of the years 2018 to 2021 to record income tax Assume the tax loss is first carried back, and that at…Required: 1. Determine the amounts necessary to record Allmond's income taxes for 20: Allmond Corporation, organized on January 3, 2021, had pretax accounting income of $25 million and taxable income of $33 million 2. What is Allmond's 2021 net income? for the year ended December 31, 2021. The 2021 tax rate is 25%. The only difference between accounting income and taxable income is estimated product warranty costs. Assume that expected payments and scheduled tax rates (based on recently enacted tax legislation) are as follows: Complete this question by entering your answers in the tabs below. Required 1 Calculation Required 1 GJ Required 2 Prepare the appropriate journal entry. (If no entry is required for a transaction/e account field. Enter your answers in millions rounded to 2 decimal places (i.e., 5 View transaction list 1 Record 2021 income taxes. X Cr 2022 2023 2024 2025 $2 million 2 million 1 million 3 million 35% 35% 35% 25% Required: 1. Determine the amounts necessary to…A company's income statement reported net income of $88,500 during 2019. The income tax return excluded a revenue item of $9,500 (reported on the income statement) because under the tax laws the $9,500 would not be reported for tax purposes until 2020. Which of the following statements is incorrect assuming a 21% tax rate? 1. Income tax expense on the income statement is $16,590. 2. A $1,995 deferred tax liability is reported as of December 31, 2019. 3. The $9,500 of revenue creates a deferred tax liability. 4. Income tax expense on the income statement exceeds the tax liability to the IRS.
- Bonita Inc. reports the following pretax income (loss) for both book and tax purposes. Pretax Year Income (Loss) Tax Rate 2018 $124,000 20 % 2019 86,000 20 % 2020 (89,000 ) 25 % 2021 126,000 25 % The tax rates listed were all enacted by the beginning of 2018. Prepare the journal entries for years 2018-2021 to record income tax expense (benefit) and income taxes payable, and the tax effects of the loss carryforward, assuming that based on the weight of available evidence, it is more likely than not that one-half of the benefits of the loss carryforward will not be realized. (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.)Blossom Inc reports the following pre-tax incomes (losses) for both financial reporting purposes and tax purposes Accounting Income Year (Loss) Tax Rate i 2021 $124,000 2022 91,000 2023 (287,000) 2024 218,000 The tax rates lated were all enacted by the beginning of 2021. Blossom reports under the ASPE future Income tavas method. Prepare the journal entries for each of the years 2021 to 2024 to record Income tax. Assume the texclosa la first carried back and that at the end of 2023, the loss carry forward benefits are judged more likely than not to be realized in the future. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem) Date Account Titles and Explanation (To record benefit from losa canryback) (To record deferred benefit from loss…Wise Company began operations at the beginning of 2021. The following information pertains to this company. 1. Pretax financial income for 2021 is $100,000. 2. The tax rate enacted for 2021 and future years is 20%. 3. Differences between the 2021 income statement and tax return are listed below: a. Warranty expense accrued for financial reporting purposes amounts to $7,000. Warranty deductions per the tax return amount to $2,000. b. Gross profit on construction contracts using the percentage-of-completion method per books amounts to $92,000. Gross profit on construction contracts for tax purposes amounts to $67,000. c. Depreciation of property, plant, and equipment for financial reporting purposes amounts to $60,000. Depreciation of these assets amounts to $80,000 for the tax return. d. A $3,500 fine paid for violation of pollution laws was deducted in computing pretax financial income. e. Interest revenue recognized on an investment in tax-exempt municipal…
- ABC Company reported pretax financial income of 7,000,000 for the year ended December 31,2021. The taxable income was 6,500,000. The differences is due to accelerated depreciation for income tax purposes. The income tax rate is 25% and ABC Company made estimated tax payment of 500,000 during the current year. REQUIREMENTS: a. Prepare journal entries for 2021. b. Compute the total income tax expenses for 2021A company makes the following journal entry for 2021: Dr. Income Tax Expense xxxx Dr. Deferred Tax Asset 80,000 Cr. Deferred Tax Liability 16,000 Cr. Income Tax Payable 200,000 On the income statement, the amount for deferred portion of income tax expense for 2021 appears as: _______________. (Very important: Just enter the amount. DO NOT put a plus or minus sign in front of the amount.)26. Kayo Na Company's income statement for the year ended December 31, 2019 shows pretax income of P2,000,000. The company's tax rate for 2019 is 30%. The following items are treated differently on the tax return and in the accounting records: Tax Return P140,000 560,000 Accounting Records Rent revenue Depreciation expense Premium on officers' life insurance P240,000 440,000 180,000 The records also show that the gross sales is P60M; cost of goods sold is P29M; sales returns and allowances, P450,000; & sales discounts, P550,000. What is the income tax payable for 2019? В. Р588,000 A. P534,000 С. Р600,000 D. P720,000
