At the end of the year, the deferred tax asset account had a balance of $12 million attributable to a cumulative temporary difference of $30 million in a liability for estimated expenses. Taxable income is $35 million. No temporary differences existed at the beginning of the year, and the tax rate is 40%. Prepare the journal entry(s) to record income taxes assuming it is more likely than not that one-fourth of the deferred tax asset will not ultimately be realized.

Q: For the year ended 30 June 20X4, Margorie Corp generated taxable operating income of CU 1,200,000 of…

A: Deferred Tax Liability: it records the fact that the company will pay more income tax in future due…

Q: the end of 2020, Payne Industries had a deferred tax asset account with a balance of $65 million…

A: Solution 1: Payne Industries Journal Entries Event Particulars Debit (In Million) Credit (In…

Q: Kara Fashions uses straight-line depreciation for financial statement reporting and MACRS for income…

A: Deferred Tax Asset Items on a company's balance sheet that may be used to reduce taxable income in…

Q: Stephens Company has a deductible temporary difference of $2,000,000 at the end of its first year of…

A: The correct answer is option (d).

Q: The ABC Company has determined that its taxable income for the year 2021 is P3,000,000. The…

A: Computation of Required balance and recognition of Deferred tax liability and Deferred tax Assets…

Q: or the year ended Dec. 31, 201X, CACA Co. reported pre-tax financial income of 9,500,000. Its…

A: Explanation of Concept Deferred Tax Assets / Deferred tax Liability : are to be calculated when…

Q: Kara Fashions uses straight-line depreciation for financial statement reporting and MACRS for income…

A: Deferred tax account shows the amount of reconciliation, which occurs due to the difference between…

Q: A company reports 2021 pretax accounting income of $10 million, but because of a single temporary…

A: Deferred tax liability: When Income Tax Expense account is less than the Income Tax Payable account,…

Q: Required: Assuming a tax rate of 21%, what will be Yebo’s net income? What will Yebo report in the…

A:

Q: At the end of the year, the deferred tax asset account had a balance of $16 million attributable to…

A: Deferred Tax: Deferred tax is an amount i.e. computed on the basis of tax liability on the income as…

Q: Delmarva Company, during its first year of operations in 2020, reported taxable income of $170,000…

A: The tax impact due to the timing differences is defined as deferred tax which refers to the taxes…

Q: Bee Corp. prepared the following reconciliation between book income and taxable income for the year…

A: Tax is a liability calculated on the income earned and paid to the government.

Q: 15. At the end of the preceding year, Mohawk Industries had a deferred tax asset of $12,250,000,…

A: A journal entry is a form of accounting entry that is used to report a business transaction in a…

Q: Bee Corp. prepared the following reconciliation between book income and taxable income for the year…

A: Current portion of provision for income taxes  = Taxable income x income tax rate

Q: Kara Fashions uses straight-line depreciation for financial statement reporting and MACRS for income…

A: 1. Calculate the deferred tax liability to be reported in the balance sheet.

Q: Mabuhay Company prepared the following reconciliation of income per book with income per tax return…

A: Given, Book income before tax=750,000 Taxable temporary difference=100,000 Deductible temporary…

Q: For the year ended December 31, 20x1, Tyre Co. reported pretax financial statement income of…

A: Formula: Current tax expense for 20x1 = Taxable income x tax rate

Q: At the end of 2017 Buckeyes industries had a deferred tax asset account with a balance of $28…

A: Solution 1: Buckeyes industries Journal Entries Event Particulars Debit (In Million) Credit…

Q: At the end of the first year of operations. an entity had taxable temporary differences totaling…

A: Calculation of Deferred tax expense / Deferred tax benefit :- Deferred tax expense =  taxable…

Q: Stephens Company has a deductible temporary difference of P2,000,000 at the end of its first year of…

A: Income tax expense is the tax expense incurred by an entity during a period. It is reported in the…

Q: A company reports pretax accounting income of $10 million, but because of a single temporary…

A: Income tax expense:   The expenses which are related to the taxable income of the individuals and…

Q: In the previous year, Hasbro Inc had a deferred tax asset of $11,750,000, attributable to its only…

A: A journal entry is a form of accounting entry that is used to report a business transaction in a…

Q: At the end of the year, the deferred tax asset account had a balance of $4 million attributable to a…

A: Date Account Titles and Explanations Debit Credit December 31 Income tax expense $11…

Q: At the end of 2015, Payne Industries had a deferred tax asset account with a balance of $30 million…

A: Valuation Allowance:  Valuation allowance is that financial item that offsets the deferred tax…

Q: Prepare journal entries to record Doubtful's income tax expense for the current year. Show…

A: Journal entries are defined as the first step in the accounting cycle in which the monetary business…

Q: At the end of the year, the deferred tax asset account had a balance of $4 million attributable to a…

A: Journal is the book of original entry in which all the transactions of the business are recorded…

Q: At December 31, 2020, Novak Company had a net deferred tax liability of $445,000. An explanation of…

A: Temporary Differences      (Asset) Liability Classification Depreciation    188000 Non Current…

Q: Lynch Company had a net deferred tax asset of $69,360 at the beginning of the year, representing a…

A: Net Unfavorable Temporary Difference = Unfavorable Temporary Difference - Favorable Temporary…

Q: o. computed a pre-tax financial income of 15,000,000 for the year ended Dec. 31, 201X. In preparing…

A: Explanation of Concept Deferred Tax Assets / Deferred tax Liability : are to be calculated when…

Q: At the end of 2017, Payne Industries had a deferred tax asset account with a balance of $30 million…

A: Given information is: Deferred tax asset balance at the end of 2017= $30 million Temporary book tax…

Q: In its first year of operations, Seagate Tech reported pretax accounting income of $780 million for…

A: Deferred Tax Liability It is the tax which  is due for the current period but it  has not yet been…

Q: A company reports pretax accounting income of $10 million, but because of a single temporary…

A:

Q: The ABC Company has determined that its taxable income for the year 2021 is P3,000,000.   The…

A: Net deferred tax assets on 12/31/2021 = (Taxable temporary differences - Deductible temporary…

Q: At December 31, DePaul Corporation had a $16 million balance in its deferred tax asset account and a…

A: Multiple Temporary DifferenceIt is very unlikely to have a single temporary difference in any…

Q: 15. At the end of the preceding year, Mohawk Industries had a deferred tax asset of $12,250,000,…

A: Given the following information: At the end of the preceding year, Mohawk Industries had a deferred…

Q: On the 30 June 2021 B Ltd had a balance of $198,000 in its deferred tax liability account and…

A: The accounting profit and taxable profit are different. There are certain events which are…

Q: As of December 31, 2022, its first year of operations, Batangas Company had taxable temporary…

A: Deferred Tax A deferred tax liability is described under IAS 12 as the amount of income tax due in…

Q: Pine Ltd is reviewing its deferred tax for the year. In each of the following situations prepare the…

A: 1. Depreciation as per Accounting=Asset value×SLM rate=$200,000×20%=$40,000 Depreciation as per…

Q: Milo Manufacturing uses straight-line depreciation for financial statement reporting and is able to…

A:

Q: At the end of the preceding year,  JP Motors had a deferred tax asset of $14,750,000, attributable…

A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…

Q: For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income…

A: Taxable income is the measurement of income which is used to calculate the amount of tax that needs…

Q: Milo Manufacturing uses straight-line depreciation for financial statement reporting and is able to…

A: Journal: Recording of a business transactions in a chronological order.

Q: At year-end of the first year of operations, Liezl Company had taxable temporary differences…

A: Taxable income for the year = Pretax financial income + taxable temporary difference - deductible…

Q: At December 31, 2020, Cascade Company had a net deferred tax liability of $450,000. An explanation…

A: Cascade Company should present deferred taxes on December 31, 2020, statement of financial position…

Q: Milo Manufacturing uses straight-line depreciation for financial statement reporting and is able to…

A: Calculation of deferred tax liability and recording of journal entry are as follows

Q: . Pine Corporation’s books showed pretax income of P600,000 for the year ended December 31, 20x1. In…

A: Income tax liability will be calculated on the taxable income of the business. There may be some…

Q: A company reports pretax accounting income of $10 million, but because of a single temporary…

A: Income tax expense:  The expenses which are related to the taxable income of the individuals and…

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.