A member of the board of directors is concerned that the company’s income statement reports income tax expense of $12.3 million, but the income tax obligation to the government for the year is only $7.9 million. How might the corporate controller explain this difference?

A member of the board of directors is concerned that the company’s income statement reports income tax expense of $12.3 million, but the income tax obligation to the government for the year is only $7.9 million. How might the corporate controller explain this difference?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter13: Choice Of Business Entity—general Tax And Nontax Factors/formation

Section: Chapter Questions

Problem 56P

See similar textbooks

Similar questions

Printer Company pays a 25,000 annual membership fee to a trade association for paper wholesalers. The trade association estimates that 60% of its dues are allocated to lobbying activities. a. What are Printers total deductible expenses for tax purposes? b. Assume the same facts as above, except that the 25,000 was incurred for in-house lobbying expenses. What are Printers total deductible expenses for tax purposes?
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. $_____________
Exco plc’s accountants have prepared the following IFRS income statement summary for the year ended 31 December 20X1: Amounts in £ Year 20X1 Total revenue 100,000 Total expenses 70,000 * Profit before tax 30,000 * includes a non-deductible expense (see below) The following information is also available: - Exco plc’s expenses include £10,000 for a penalty charge which is not tax-deductible. - The statutory tax rate on corporate profits is 20%. The current tax (expense) reported for the year ended 31 December 20X1 is: a. £3,000 b. £6,000 c. £8,000 d. £9,000 e. £13,000
XYZ is a calendar-year corporation that began business on January 1, 2021. For the year, it reported the following information in its current-year audited income statement. Notes with important tax information are provided below. XYZ corporation Income statement For current year Book Income Revenue from sales $ 40,000,000 Cost of Goods Sold (27,000,000) Gross profit $ 13,000,000 Other income: Income from investment in corporate stock 300,0001 Interest income 20,0002 Capital gains (losses) (4,000) Gain or loss from disposition of fixed assets 3,0003 Miscellaneous income 50,000 Gross Income $ 13,369,000 Expenses: Compensation (7,500,000)4 Stock option compensation (200,000)5 Advertising (1,350,000) Repairs and Maintenance (75,000) Rent (22,000) Bad Debt expense (41,000)6 Depreciation (1,400,000)7 Warranty expenses (70,000)8 Charitable donations (500,000)9 Meals (all at restaurants) (18,000) Goodwill impairment (30,000)10…
XYZ is a calendar-year corporation that began business on January 1, 2021. For the year, it reported the following information in its current-year audited income statement. Notes with important tax information are provided below. XYZ corp. BookIncome Income statement For current year Revenue from sales $ 40,000,000 Cost of Goods Sold (27,000,000 ) Gross profit $ 13,000,000 Other income: Income from investment in corporate stock 300,000 1 Interest income 20,000 2 Capital gains (losses) (4,000 ) Gain or loss from disposition of fixed assets 3,000 3 Miscellaneous income 50,000 Gross Income $ 13,369,000 Expenses: Compensation (7,500,000 )4 Stock option compensation (200,000 )5 Advertising (1,350,000 ) Repairs and Maintenance (75,000 ) Rent (22,000 ) Bad Debt expense (41,000 )6 Depreciation (1,400,000 )7 Warranty expenses (70,000 )8 Charitable donations (500,000 )9 Meals (18,000 )…
XYZ is a calendar-year corporation that began business on January 1, 2021. For the year, it reported the following information in its current-year audited income statement. Notes with important tax information are provided below. XYZ corp. BookIncome Income statement For current year Revenue from sales $ 40,000,000 Cost of Goods Sold (27,000,000 ) Gross profit $ 13,000,000 Other income: Income from investment in corporate stock 300,000 1 Interest income 20,000 2 Capital gains (losses) (4,000 ) Gain or loss from disposition of fixed assets 3,000 3 Miscellaneous income 50,000 Gross Income $ 13,369,000 Expenses: Compensation (7,500,000 )4 Stock option compensation (200,000 )5 Advertising (1,350,000 ) Repairs and Maintenance (75,000 ) Rent (22,000 ) Bad Debt expense (41,000 )6 Depreciation (1,400,000 )7 Warranty expenses (70,000 )8 Charitable donations (500,000 )9 Meals (18,000 )…
Buster Corporation reported $150,000 in revenues in its Year 1 financial statements, of which $50,000 will not be included in the tax return until Year 2. The enacted tax rate is 34% for Year 1 and 25% for Year 2. What amount should Roger report for deferred income tax liability in its balance sheet at December 31, Year 1?
XYZ is a calendar-year corporation that began business on January 1, 2021. For the year, it reported the following information in its current-year audited income statement. Notes with important tax information are provided below. Use Exhibit 16-6. XYZ corporation Income statement For current year Book Income Revenue from sales $ 40,400,000 Cost of Goods Sold (27,270,000) Gross profit $ 13,130,000 Other income: Income from investment in corporate stock 300,0001 Interest income 21,6002 Capital gains (losses) (4,000) Gain or loss from disposition of fixed assets 3,0003 Miscellaneous income 50,000 Gross Income $ 13,500,600 Expenses: Compensation (7,504,000)4 Stock option compensation (204,000)5 Advertising (1,354,000) Repairs and Maintenance (77,000) Rent (24,000) Bad Debt expense (43,000)6 Depreciation (1,450,000)7 Warranty expenses (74,000)8 Charitable donations (500,000)9 Meals (all at restaurants) (18,400) Goodwill impairment…
XYZ is a calendar-year corporation that began business on January 1, 2020. For the year, it reported the following information in its current-year audited income statement. Notes with important tax information are provided below. XYZ corp. BookIncome Income statement For current year Revenue from sales $ 40,000,000 Cost of Goods Sold (27,000,000 ) Gross profit $ 13,000,000 Other income: Income from investment in corporate stock 300,000 1 Interest income 20,000 2 Capital gains (losses) (4,000 ) Gain or loss from disposition of fixed assets 3,000 3 Miscellaneous income 50,000 Gross Income $ 13,369,000 Expenses: Compensation (7,500,000 )4 Stock option compensation (200,000 )5 Advertising (1,350,000 ) Repairs and Maintenance (75,000 ) Rent (22,000 ) Bad Debt expense (41,000 )6 Depreciation (1,400,000 )7 Warranty expenses (70,000 )8 Charitable donations (500,000 )9 Meals (18,000 )…
Hunt Taxidermy, Inc., is concerned about the taxes paid by the company in 2021. In addition to $14.1 million of taxable income, the firm received $1,555,000 of interest on state-issued bonds and $1,110,000 of dividends on common stock it owns in Oakdale Fashions, Inc. (Use corporate tax rate of 21 percent for your calculations.)
ABC Corp. in 2010 made available the following financial information for TY2021: Balance sheet: Asset - 50,000,000 Liability - 30,000,000 Stock Equity - 20,000,000 Income statement: Gross sales - 100,000,000 Cost of sales - 60,000,000 Operating Expense - 50,000,000 How much is the income tax payable under CREATE Law if the taxpayer is a domestic corporation?
1. If a corporation’s tax return shows taxable income of $98,300 for Year 2 and a tax rate of 40%, how much will appear on the December 31, Year 2, balance sheet for “Income taxes payable” if the company has made estimated tax payments of $35,600 for Year 2? 2. An income statement that reports current tax expense of $81,800 and deferred tax benefit of $23,700 will report total income tax expense of $? If total tax expense is $47,500 and deferred tax expense is $64,900, then the current portion of the expense computation is referred to as current tax expense of $ ?