A corporation has the following taxable income in its first 5 years of operations: Tax year Taxable income Tax rate Income tax paid 20X1 150,000 35% 52,500 20X2 168,000 37% 62,160 20X3 192,000 35% 67,200 20X4 240,000 40% 96,000 20X5 (420,000 ) 38% Required: Prepare the journal entry to recognize the tax recovery in 20X5, assuming the company carries losses back to the earliest year allowed. (If no entry is required for a transaction/event, select "No journal entry required" in the first accoun

A corporation has the following taxable income in its first 5 years of operations: Tax year Taxable income Tax rate Income tax paid 20X1 150,000 35% 52,500 20X2 168,000 37% 62,160 20X3 192,000 35% 67,200 20X4 240,000 40% 96,000 20X5 (420,000 ) 38% Required: Prepare the journal entry to recognize the tax recovery in 20X5, assuming the company carries losses back to the earliest year allowed. (If no entry is required for a transaction/event, select "No journal entry required" in the first accoun

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter2: Financial Statements, Cash Flow,and Taxes

Section: Chapter Questions

Problem 10MC

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Caloundra Corporation has book income of $ 40,000. Included in the book income is $3,000 of tax-exempt interest, $7,000 of book income tax expense, and a $2,000 nondeductible fine. Also included in book income are $10,000 of dividends. Caloundra received from a 30 percent owned corporation. Using this information and Form 1120 provide the amounts that go on each line on the form. Form 1120, Schedule M-1 Line 1 $__________________ Form 1120, Schedule M-1, Line 10 $__________________ Form 1120, Page 1, Line 28 $__________________ Form 1120, Schedule C, Line 2(a) $ and 2(c) $__________________ Form 1120, Schedule C, Line 24 $__________________ Form 1120, Page 1, Line 29b $__________________ Form 1120, Page 1 , Line 30 $__________________
Assume that a corporation has $100,000 of taxable income from operations plus $5,000 of interest income and $10,000 of dividend income. What is the company’s federal tax liability?
In the current year, Madison Corporation had 50,000 of taxable income at a tax rate of 25%. During the year, Madison began offering warranties on its products and has a Warranty liability for financial reporting purposes of 5,000 at the end of the year. Warranty expenses are not deductible until paid for income tax purposes. Prepare the journal entry to record Madisons income taxes at the end of the year.
Grevilla Corporation is a manufacturing company. The corporation has accumulated earnings of $950,000, and it can establish reasonable needs for $400,000 of that amount. Calculate the amount of the accumulated earnings tax (if any) that Grevilla Corporation is subject to for this year. $_____________