Nalad Corp. provided the following data related to accounting and taxable income:20X820X9Pre-tax accounting income (financial statements)Taxable income (tax return)$510,000295,00040%$495,000710,00040%Income tax rateThere are no existing temporary differences other than those reflected in these data. There are no permanent differences.Required:1-a. How much tax expense would be reported in each year if the taxes payable method was used?Tax Expense20X820X91-b. What is the implied tax rate? (Round your answers to 1 decimal place.)20X820X9Implied tax rate 2-a. How much tax expense would be reported using comprehensive tax allocation (liability method).Tax Expense20X820X92-b. How much deferred income tax would be reported using comprehensive tax allocation (liability method).DeferredIncome Tax20X820X92-c. Why is the two year total tax expense is the same under both tax payable method and liability method? (Select all that apply.)O Temporary difference between accounting and taxable income has reversed over two-year time frame.Temporary difference between accounting and taxable income has not reversed over two-year time frame.Permanant difference between accounting and taxable income has reversed over two-year time frame.Permanant difference between accounting and taxable income has not reversed over two-year time frame.OO00

Answered: 20X8 20X9 tax accounting income…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter2: The Domestic And International Financial Marketplace

Section2.A: Taxes

Problem 3P

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Barth James Inc. has the following deferred tax assets and liabilities: 12,000 noncurrent deferred tax asset, and 10,500 noncurrent deferred tax liability. Show how Barth James would report these deferred tax assets and liabilities on its balance sheet.
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

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20X8 20X9 tax accounting income (financial statements) ple income (tax return) ne tax rate $510,000 295,000 $495,000 710,000 40% 40% are no existing temporary differences other than those reflected in these data. There are no ed: