9. Carla Vista Co. at the end of 2020, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income $1050000 Estimated litigation expense 2750000 Installment sales (2200000) Taxable income $1600000 The estimated litigation expense of $2750000 will be deductible in 2022 when it is expected to be paid. The gross profit from the installment sales will be realized in the amount of $1100000 in each of the next two years. The estimated liability for litigation is classified as noncurrent and the installment accounts receivable are classified as $1100000 cur
9. Carla Vista Co. at the end of 2020, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income $1050000 Estimated litigation expense 2750000 Installment sales (2200000) Taxable income $1600000 The estimated litigation expense of $2750000 will be deductible in 2022 when it is expected to be paid. The gross profit from the installment sales will be realized in the amount of $1100000 in each of the next two years. The estimated liability for litigation is classified as noncurrent and the installment accounts receivable are classified as $1100000 cur
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 3P: Multiple Temporary Differences Wilcox Company has prepared the following reconciliation of its...
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29.
Carla Vista Co. at the end of 2020, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows:
The estimated litigation expense of $2750000 will be deductible in 2022 when it is expected to be paid. The gross profit from the installment sales will be realized in the amount of $1100000 in each of the next two years. The estimated liability for litigation is classified as noncurrent and the installment accounts receivable are classified as $1100000 current and $1100000 noncurrent. The income tax rate is 20% for all years.
The income tax expense is
| Pretax financial income | $1050000 |
| Estimated litigation expense | 2750000 |
| Installment sales | (2200000) |
| Taxable income | $1600000 |
The estimated litigation expense of $2750000 will be deductible in 2022 when it is expected to be paid. The gross profit from the installment sales will be realized in the amount of $1100000 in each of the next two years. The estimated liability for litigation is classified as noncurrent and the installment accounts receivable are classified as $1100000 current and $1100000 noncurrent. The income tax rate is 20% for all years.
The income tax expense is
$1100000.
$550000.
$320000.
$210000.
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Income tax expenses is total tax amount calculated on taxable income by effective tax rate.
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