a.) For the current year temporary differences existed between the financial statement carrying amounts and the tax basis of the following: Carrying Amount Tax Basis Future Taxable or (Deductible) Amount Buildings and equipment $ 50,000,000 $ 36,000,000 $ 14,000,000 Prepaid insurance 3,000,000 0 3,000,000 Liability-loss contingency 12,000,000 0 (12,000,000 ) (b.) No temporary differences existed at the beginning of the year. (c.) Pretax accounting income was $200,000,000 and taxable income was $110,000,000 for the year and the tax rate is 40%. Permanent differences are the cause of any difference between pretax accounting income and taxable income that are not due to temporary differences. Required: Prepare the journal entry to record the tax provision for the current yea
a.) For the current year temporary differences existed between the financial statement carrying amounts and the tax basis of the following: Carrying Amount Tax Basis Future Taxable or (Deductible) Amount Buildings and equipment $ 50,000,000 $ 36,000,000 $ 14,000,000 Prepaid insurance 3,000,000 0 3,000,000 Liability-loss contingency 12,000,000 0 (12,000,000 ) (b.) No temporary differences existed at the beginning of the year. (c.) Pretax accounting income was $200,000,000 and taxable income was $110,000,000 for the year and the tax rate is 40%. Permanent differences are the cause of any difference between pretax accounting income and taxable income that are not due to temporary differences. Required: Prepare the journal entry to record the tax provision for the current yea
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 7C
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Question
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a.) For the current year temporary differences existed between the financial statement carrying amounts and the tax basis of the following:
| Carrying Amount | Tax Basis | Future Taxable or (Deductible) Amount |
|||||||
| Buildings and equipment |
$ | 50,000,000 | $ | 36,000,000 | $ | 14,000,000 | |||
| Prepaid insurance | 3,000,000 | 0 | 3,000,000 | ||||||
| Liability-loss contingency |
12,000,000 | 0 | (12,000,000 | ) | |||||
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(b.) No temporary differences existed at the beginning of the year.
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(c.) Pretax accounting income was $200,000,000 and taxable income was $110,000,000 for the year and the tax rate is 40%. Permanent differences are the cause of any difference between pretax accounting income and taxable income that are not due to temporary differences.
Required:
Prepare the
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