Please Introduction and explanation 1 and 2 question answers both subparts answer no plagiarism please and what is correct option and incorrect option why? Explanation please 1. What are differences that havefuture tax consequences are:• A. Temporary differences• B. Taxable temporary differences• C. Permanent differences• D. deductible temporary differences2. At paid to suppliers for the purchaseof inventory is known as:• A. Output taxB. Income tax. C. Dividend tax• D. Input tax3. The estimated taxable income forthe year ended 31 December 2021 is R8 425 000. What is the 1st provisionalpayment amount?. A. R 1263 750.00. B. R 1 179 500• C. R 2 359 000• D. R 4 212 500

First of all we have to understand that certain deductions in income tax are not allowed although we…

Answered: 1. What are differences that have…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 2P: Temporary and Permanent Differences In the current year, you are calculating a diversified companys...

See similar textbooks

Similar questions

Temporary and Permanent Differences In the current year, you are calculating a diversified companys deferred taxes. Based on an analysis of the companys current taxable income and pretax financial income, you have identified the following items that create differences between the two amounts and that may result in differences between the companys future taxable income and its nature pretax financial income: Required: For each difference, indicate whether it is a temporary difference (T) or a permanent difference (P) by placing the appropriate letter on the line provided. If the difference is a temporary difference, also indicate for the current year whether it will result in a future taxable amount (FT) or a future deductible amount (FD).
Definitions The FASB has defined several terms in regard to accounting for income taxes. Below are various code letters (for terms) followed by definitions. 1. The deferred tax consequences of future deductible amounts and operating loss carryforwards 2. A difference between the tax basis of an asset or liability and its reported amount in the financial statements that will result in taxable or deductible amounts in future years when the reported amount of the asset or liability is recovered or settled, respectively 3. Temporary difference that results in taxable amounts in future years when the related asset or liability is recovered or settled, respectively 4. The future effects on income taxes, as measured by the applicable enacted tax rate and provisions of the enacted tax low, resulting from temporary differences and operating loss carryforwards at the end of the current year 5. The change during the year in a corporations deferred tax liabilities and assets 6. The deferred tax consequences of future taxable amounts 7. The portion of o deferred tax asset for which it is more likely than not that a tax benefit will not be realized 8. Temporary difference that results in deductible amounts in future years when the related asset or liability is recovered or settled, respectively 9. The sum of income tax payable and deferred tax expense (or benefit) 10. The amount of income taxes paid or payable (or refundable) for the current year 11. An excess of tax deductible expenses over taxable revenues in a year that may be carried forward to reduce taxable income in a future year 12. The excess of taxable revenues over tax deductible expenses and exemptions for the year 13. Income tax expense divided by income before income taxes
Interperiod Tax Allocation Klerk Company had four temporary differences between its pretax financial income and its taxable income during 2019 as follows: At the beginning of 2019, Klerk had a deferred tax liability of 84,300 related to Temporary Difference #2 and a deferred tax asset of 21,090 related to Temporary Difference #4. Based on its tax records, Klerk earned taxable income of 270,000 for 2019. Kerks accountant has prepared the following schedule showing the total future taxable and deductible amounts at the end of 2019 for its four temporary differences: The company has a history of earning income and expects to be profitable in the future. The income tax rate for 2019 is 40%, but in 2018 Congress enacted a 30% tax rate for 2020 and future years. During 2019, for financial accounting purposes, Klerk reported revenues of 750,000 and expenses of 447,100. The deferred taxes related to Temporary Differences #1, #2, and #4 are considered to be noncurrent by the company; the deferred tax related to Temporary Difference #3 is considered to be current. Required: 1. Prepare Klerks income tax journal entry for 2019. 2. Prepare a condensed 2019 income statement for Klerk. 3. Show how the income tax items are reported on Klerks December 31, 2019, balance sheet.

Recommended textbooks for you

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

SWFT Corp Partner Estates Trusts

Accounting

ISBN:

9780357161548

Author:

Raabe

Publisher:

Cengage

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

SWFT Corp Partner Estates Trusts

Accounting

ISBN:

9780357161548

Author:

Raabe

Publisher:

Cengage

SWFT Essntl Tax Individ/Bus Entities 2020

Accounting

ISBN:

9780357391266

Author:

Nellen

Publisher:

Cengage

Income Tax Fundamentals 2020

Accounting

ISBN:

9780357391129

Author:

WHITTENBURG

Publisher:

Cengage

Individual Income Taxes

Accounting

ISBN:

9780357109731

Author:

Hoffman

Publisher:

CENGAGE LEARNING - CONSIGNMENT

SEE MORE TEXTBOOKS