E19.4 (LO 1, 2) (Three Differences, Compute Taxable Income, Entry for Taxes) Havaci SpA reports pretax financial income of €80,000 for 2022. The following items cause taxable income to be different than pretax financial income. 1. Depreciation on the tax return is greater than depreciation on the income statement by €16,000. 2. Rent collected on the tax return is greater than rent revenue reported on the income statement by €27,000. 3. Fines for pollution appear as an expense of €11,000 on the income statement. Havaci's tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2022. Instructions a. Compute taxable income and income taxes payable for 2022. b. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2022. c. Prepare the income tax expense section of the income statement for 2022, beginning with the line "Income before income taxes." d. Compute the effective income tax rate for 2022.

E19.4 (LO 1, 2) (Three Differences, Compute Taxable Income, Entry for Taxes) Havaci SpA reports pretax financial income of €80,000 for 2022. The following items cause taxable income to be different than pretax financial income. 1. Depreciation on the tax return is greater than depreciation on the income statement by €16,000. 2. Rent collected on the tax return is greater than rent revenue reported on the income statement by €27,000. 3. Fines for pollution appear as an expense of €11,000 on the income statement. Havaci's tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2022. Instructions a. Compute taxable income and income taxes payable for 2022. b. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2022. c. Prepare the income tax expense section of the income statement for 2022, beginning with the line "Income before income taxes." d. Compute the effective income tax rate for 2022.

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter3: Taxes On The Financial Statements

Section: Chapter Questions

Problem 14P

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1. In 2022, Dunder Mifflin Inc. had one temporary difference of $398 that resulted in a deferred tax asset. Dunder Mifflin's taxable income is $1098 in 2022 and its tax rate is 30%. The company had no prior deferred tax balance. Which of these will be included in Dunder Mifflin's journal entry at the end of 2022? Choose the closest answer. a. A credit to Deferred Tax Asset for $119.40 b. A credit to Deferred Tax Asset for $398.00 c. A credit to Income Tax Payable for $329.40 d. A credit to Income Tax Payable for $210.00
Sheridan corporation reports pretax financial income of $73,500 for 2025. The following items cause taxable income to be different than pretax financial income. 1. Depreciation on the tax return is greater than depreciation on th eincome statement by $17,600 2. Rent collected on the tax return is greater than rent recognized on the income statement by $19,900 3. Fines for pollution appear as an expense of $10,500 on the income statement Sheridan's tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2025. Compute taxable income and income taxes payable for 2025
On December 31, 2020, Landmark Company reported the following:Income before tax for accounting purposes, P11,850,000; Rent expensefor financial accounting purposes is P1,500,000 while rent expense for taxpurposes is P1,050,000; Tax depreciation is P3,000,000 while accountingdepreciation is P1,500,000; Loss on a case incurred but not yet paid sotax-deductible in the future is P600,000. The tax rate is 30%. What is the amount of deferred tax asset?
On December 31, 2020, Landmark Company reported the following:Income before tax for accounting purposes, P11,850,000; Rent expensefor financial accounting purposes is P1,500,000 while rent expense for taxpurposes is P1,050,000; Tax depreciation is P3,000,000 while accountingdepreciation is P1,500,000; Loss on a case incurred but not yet paid sotax-deductible in the future is P600,000. The tax rate is 30%. Compute for the net income after tax.
How do you get the answer to part 4? Corning-Howell reported taxable income in 2021 of $156 million. At December 31, 2021, the reported amount of some assets and liabilities in the financial statements differed from their tax bases as indicated below: Carrying Amount Tax Basis Assets Current Net accounts receivable $ 44 million $ 48 million Prepaid insurance 56 million 0 Prepaid advertising 40 million 0 Noncurrent Investments in equity securities (fair value)* 40 million 0 Buildings and equipment (net) 396 million 316 million Liabilities Current Deferred subscription revenue 48 million 0 Long-term Liability—compensated future absences 630 million 0 *Gains and losses taxable when investments are sold. The total deferred tax asset and deferred tax liability amounts at January 1, 2021, were $174.25 million and…
P18-1 Definitions The FASB has defined several terms in regard to accounting for income taxes. Below are various code letters (for terms) followed by definitions. Code Letter Term A Future deductible amount B Income tax payable (or refund) C Effective tax rate D Valuation allowance E Deferred tax asset F Operating loss carryforward G Taxable income H Deferred tax consequences I Future taxable amount J Deferred tax liability K Temporary difference L Income tax expense (or benefit) M Deferred tax expense (or benefit) _________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…
Mf6. As per the latest tax update, the aggregate amt of distributions recvieved by an indivivdual,tat may be treated as "coronavirus-related distribution" for any taxable year,shall not exceed 100K, 250K, 50K, OR 80K?
At December 31, 2022 Mindoro Corporation’s taxable profit is P5,000,000. The following items are the temporary differences that caused Mindoro’s income in the income tax return to differ from the amount reported in the income statement: Future deductible amounts expected to reverse in 2023 of P400,000 and future taxable amounts expected to reverse in 2023 and 2024 of P500,000 and P900,000, respectively. Mindoro’s income tax rate is 35%. The income tax expense reported by Mindoro in its December 31, 2022 income statement is a. P2,100,000 c. P1,750,000 b. P1,400,000 d. P1,785,000
In 2022, Wynn Sheet Metal had taxable income of $8,050. The amount of depreciation reported in the 2022 tax return was $2,875, while the amount of depreciation reported in the income statement for that year was $1,175. Assuming no other differences between tax and accounting income, Wynn's pretax accounting income for 2022 was:
P18-2 Temporary and Permanent Differences In the current year, you are calculating a diversified company’s deferred taxes. Based on an analysis of the company’s current taxable income and pretax financial income, you have iden-tified the following items that create differences between the two amounts and that may result in differences between the company’s future taxable income and its future pretax financial income: ________ 1. Percentage depletion deducted for taxes in excess of cost depletion for financial reporting _________2. Warranty costs to be deducted for taxes that were deducted as warranty expense for financial reporting _________3. Gross profit to be recognized for taxes under the completed-contract method that was recognized for financial reporting under the percentage-of-completion method _________4. Officers’ life insurance premium expense deducted for financial reporting _________5. Rent revenue to be recognized for financial reporting that was reported for taxes when…
Coronado reported the following pretax financial income (loss) for the years 2020–2022. 2020 $122,400 2021 (144,000) 2022 183,600 Pretax financial income (loss) and taxable income (loss) were the same for all years involved. The enacted tax rate was 20% for 2020-2022. Prepare the journal entries for the years 2020–2022 to record income tax expense, income taxes payable, and the tax effects of the loss carryforward, assuming that based on the weight of available evidence, it is more likely than not that one-fifth of the benefits of the loss carryforward will not be realized. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Prepare the income tax section of the 2021 income statement beginning with the line “Income (loss) before income taxes.”. (Enter negative amounts using either a negative sign preceding the number e.g.…
How do you get the answer on below? Corning-Howell reported taxable income in 2021 of $156 million. At December 31, 2021, the reported amount of some assets and liabilities in the financial statements differed from their tax bases as indicated below: Carrying Amount Tax Basis Assets Current Net accounts receivable $ 44 million $ 48 million Prepaid insurance 56 million 0 Prepaid advertising 40 million 0 Noncurrent Investments in equity securities (fair value)* 40 million 0 Buildings and equipment (net) 396 million 316 million Liabilities Current Deferred subscription revenue 48 million 0 Long-term Liability—compensated future absences 630 million 0 *Gains and losses taxable when investments are sold. The total deferred tax asset and deferred tax liability amounts at January 1, 2021, were $174.25 million and…