2. On January 1, 2019, KRIS KRINGLE Company purchased a ₱600,000 machine, with a five-year useful life and no residual value. The machine was depreciated by an accelerated method for book and tax purposes. The carrying amount was ₱240,000 on December 31, 2020. On January 1, 2021, the entity changed to the straight-line method for financial reporting purposes. The income tax rate is 30%. On January 1, 2021, what amount should be reported as deferred tax liability as a result of the change?   ₱ 36,000   ₱ - 0 -   ₱ 72,000   ₱ 120,000

Q: n March 10, 2021, S Incorporated paid property taxes of 240,000 for the calendar year 2021. On April…

A: Concept - Interim reporting treats each interim period as an integral part of the annual period.…

Q: 2021, Mill Corp. incurred a 100,000 net loss from disposal of a business segment. Also, on June 30,…

A: Solution: Loss from disposal of a business segment will be full included in the net income or loss…

Q: ABC Company purchased a machine costing P 10,000,000 on January 1, 2021  with an estimated useful…

A: Here in this question, we are required to calculate income tax payable as of December 31,2025. When…

Q: OVE INC. has a policy of using non-current assets until they can no longer operate and are…

A: Explanation of Concept Deferred Tax Assets / Deferred tax Liability : are to be calculated when…

Q: n March 2, 2021, HABIBIYUCK bought an equipment costing P1,200,000. It is the Company’s policy to…

A: Solution: Depreciation rate - SLM = 1/10 = 10% Deprecation rate - DDB = 10%*2 = 20% Depreciation for…

Q: Futabatei Enterprises purchased a delivery truck on January 1, 2020, at a cost of $27,000. The truck…

A: a.  Prepare income statements for 2020 and 2021.

Q: On January 2, 2020, Maelet Co. purchased a franchise with a useful life of ten years for P600,000.…

A: given information franchise cost = p600000 useful years = 10 years straight-line method is used in…

Q: On January 1, 2020, Bonita Industries purchased a machine costing $358000. The machine is in the…

A: MACRS or modified accelerated cost recovery system is tax depreciation system being used in USA. The…

Q: MJ Limited purchased a machinery for $50,000 for its operations on 1 October 2015 and have been…

A: Assets are anything of value which provides economic benefits to a business. Assets are presented on…

Q: 1. During the year ended December 31, 2021, management of Alpha Corporation (the Company) decided to…

A: 1. Tax gain on sale of equipment: Tax gain on sale of equipment = Sale value – (Original cost –…

Q: Chaz Corporation has taxable income in 2020 of $396,000 for purposes of computing the §179 expense…

A: Depreciation expense can be defined as a non-cash expenditure which represents the normal wear &…

Q: On January 1, 2013, Ameen Company purchased a building for $36 million. Ameen uses straight-line…

A: Deferred tax:   Deferred taxes are taxes that will be paid in future period.   Deferred tax is a…

Q: Company X incurred the following transactions in the current year. For each transaction, explain…

A: Income tax means the charge or levy which was collect by the government authority on the income…

Q: Several years ago, Western Electric Corp. purchased equipment for $20,500,000. Western uses…

A: Journal entry - It refers to the process where the business transactions are recorded in the books…

Q: Several years ago, Western Electric Corp. purchased equipment for $21,000,000. Western uses…

A: financial reporting  tax reporting Carrying value at December 31, 2020 [A]    18,900,000…

Q: On January 1, 2021, Company Ltd. decided to sell one of its processing plants located in New York.…

A: The income statement is prepared by the business organization so as to know how much amount of Gross…

Q: On January 1, 2021, NUBD Co. purchased a new machine for P100,000 with an estimated useful life of…

A:

Q: March 1, 2021, Bharat Corporation purchased an equipment for P500,000 with an estimated residual…

A: Bharat corporation would recognise the lease rentals received +Lease bonus if any received and less…

Q: On December 31, 2020, MECH COMPAY’S only building has a carrying amount of P1,350,000. The net…

A: Impairment loss=1350000-950000=400000

Q: On June 1, 2021, Sandalwood Corporation purchases a passenger automobile for 100 percent use in its…

A: Determination of adjusted basis of the asset placed in service applying for bonus depreciation.…

Q: Explain in detail using relevant tax laws and cases whether this amount of $70,000 is deductible for…

A: Tax laws can be defined as the governing laws which helps the companies or the taxpayers to take…

Q: Shimei Inc. purchased computer equipment on March 1, 2020, for $31,000. The computer equipment has a…

A: Depreciation:   Depreciation expense is a non-cash expense, which is recorded on the income…

Q: At December 31, 2020 Company B had one temporary difference (related to depreciation) that resulted…

A: Tax is the amount which an individual is liable to pay the government for business operation within…

Q: WhyRU Company usually depreciates its equipment using straight line method for accounting purposes,…

A: Deferred Tax asset & Liability: Deferred tax liability is the amount  income tax payable in…

Q: On June 30, 2021, Mill Corp. incurred a 100,000 net loss from disposal of a business segment. Also,…

A: Here we will apply the accounting rule that for an interim report all revenues and gains have to be…

Q: On January 1, 2020, Bonita Industries purchased a machine costing $358000. The machine is in the…

A: MACRS (Modified Accelerated Cost Recovery System) is a method of calculating depreciation in which…

Q: At the beginning of 2015, Pitman Co. purchased as asset for $1,200,000 with an estimated useful life…

A: Straight line depreciation=Cost-Salvage valueUseful life=$1,200,000-$200,0005=$200,000

Q: Lehman Corporation purchased a machine on January 2, 2017, for $4,000,000. The machine has an…

A: The correct answer is option a, that is, $144,000.

Q: At the beginning of 2021, Crane Co. purchased an asset for $1750000 with an estimated useful life of…

A: SOLUTION   FORMULAS- 1-DEPRECIATION AS PER STRAIGHT LINE METHOD = COST OF ASSET - SALVAGE VALUE / NO…

Q: On June 30, 2021, Coco Inc. incurred a P2,000,000 net loss from disposal of a business segment. Also…

A: The question is related to Interim period is a period less than one fiscal year. Generally…

Q: financial reporting

A: Deferred tax liability refers to tax which is due for current period but not paid.

Q: Assume that for a particular company, the only temporary difference for tax-effect accounting…

A: Depreciation refers to the permanent decline in value of tangible assets, because of wear and tear…

Q: Several years ago, Western Electric Corp. purchased equipment for $22,000,000. Western uses…

A: The calculation of book depreciation and tax depreciation has been made as follows: Book…

Q: The Costanza Corporation purchased some equipment August 1, 2021 for $17,040 and expects to use it…

A: Formula: Straight line method depreciation = ( Asset cost - Salvage value ) / Useful life

Q: On January 1, 2018, Ameen Company purchased major pieces of manufacturing equipment for a total of…

A: Deferred tax: Deferred Taxes are taxes that will be paid in future period.Deferred Tax is a…

Q: On January 1, 2021, Save Company discovered that it had incorrectly expensed a P2,100,000 machine…

A: Compute the depreciation per year: Depreciation per year = (P2,100,000-100,000)/10 = P200,000 Thus,…

Q: On January 1, 2020, equipment costing $582,800 is purchased. For financial reporting purposes, the…

A: Compute the income tax expense:   Amount due per tax return $132,100 Tax rate  20% Income…

Q: On December 31, 2021, the end of the fiscal year, Revolutionary Industries completed the sale of its…

A: Income tax expense = Income from continuing operations before income taxes X tax rate = 12500000 x…

Q: On 1, 2020, Midland Company purchased a machine for P1,400,000. This machine has - year useful…

A: Income tax:  It is the amount a person is liable to pay on the earned amount in an accounting year.…

Q: haz Corporation has taxable income in 2021 of $312,000 for purposes of computing the §179 expense…

A: Capitalized Cost: A capitalized cost is a cost added to the expense premise of a proper resource on…

Q: On January 1, 2019, Nobel Corporation acquired machinery at a cost of P600,000. Nobel adopted the…

A: solution annual depreciation under straight line method =600000 / 10 =60000 Depreciation rate under…

Q: On November 4, 2020, GT Corporation sells a piece of its equipment. GT Corporation had initially…

A: Depreciation is a reduction in the value of assets due to the usage of that asset. We can evaluate…

Q: At the beginning of 2018, Pitman Co. purchased an asset for $1,800,000 with an estimated useful life…

A: Depreciation is the loss in the value of the asset caused due to its usage, wear, and tear. There…

Q: 1. What amount should Warren report as the cumulative effect of this change? 2. On January 1, year…

A: A change in depreciation method is no longer given cumulative effect treatment on the income…

Q: 4- Daniel Company purchased an equipment costing P2,000,000 on January 1, 2020. The equipment has an…

A: Income tax expense for the year is equal to the income reported for the year multiplied by the tax…

Q: Several years ago, Western Electric Corp. purchased equipment for $20 million. Western uses…

A: Deferred tax indicates the amount of tax payable by the taxpayer which is not paid yet and the…

Q: Assuming that the corporation elects the accelerated method of cost recovery for the asset and does…

A: The answer for the multiple choice question and relevant working are presented hereunder : The…

Q: WhyRU Company usually depreciates its equipment using straight line method for accounting purposes,…

A: Here in this question, we are required to calculate cumulative deferred tax liability in 2020 and…

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.