Below is the Retained Earnings account for the year 2020 for Concord Corp. Retained earnings, January 1, 2020 Add: Gain on sale of investments (net of tax) Net income Refund on litigation with government, related to the year 2017 (net of tax) Recognition of income earned in 2019, but omitted from income statement in that year (net of tax) Deduct: Loss on discontinued operations (net of tax) Write-off of goodwill (net of tax) Cumulative effect on income of prior years in changing from LIFO to FIFO inventory valuation in 2020 (net of tax) Cash dividends declared Retained earnings, December 31, 2020 $43,510 86,810 23,910 CONCORD CORP. Retained Earnings Statement 27,710 37,310 62,310 25,510 34,310 $259,910 181,940 441,850 159,440 $282,410 (a) Prepare a corrected retained earnings statement. Concord Corp. normally sells investments of the type mentioned above. FIFC inventory was used in 2020 to compute net income. (List items that increase adjusted retained earnings first)

Below is the Retained Earnings account for the year 2020 for Concord Corp. Retained earnings, January 1, 2020 Add: Gain on sale of investments (net of tax) Net income Refund on litigation with government, related to the year 2017 (net of tax) Recognition of income earned in 2019, but omitted from income statement in that year (net of tax) Deduct: Loss on discontinued operations (net of tax) Write-off of goodwill (net of tax) Cumulative effect on income of prior years in changing from LIFO to FIFO inventory valuation in 2020 (net of tax) Cash dividends declared Retained earnings, December 31, 2020 $43,510 86,810 23,910 CONCORD CORP. Retained Earnings Statement 27,710 37,310 62,310 25,510 34,310 $259,910 181,940 441,850 159,440 $282,410 (a) Prepare a corrected retained earnings statement. Concord Corp. normally sells investments of the type mentioned above. FIFC inventory was used in 2020 to compute net income. (List items that increase adjusted retained earnings first)

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 12P: Comprehensive Colt Company reports pretax financial income of 143,000 in 2019. In addition to pretax...

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Comprehensive Colt Company reports pretax financial income of 143,000 in 2019. In addition to pretax income from continuing operations (of which revenues are 295,000), the following items are included in this pretax income: Colts taxable income totals 93,000 in 2019. The difference between the pretax financial income and the taxable income is due to the excess of tax depreciation over financial depreciation on assets used in continuing operations. At the beginning of 2019, Colt had a retained earnings balance of 310.000 and a deferred tax liability of 8,100. During 2019, Colt declared and paid dividends of 48,000. It is subject to tax rates of 15% on the first 50,000 of income and 30% on income in excess of 50,000. Based on proper interperiod tax allocation procedures, Colt has determined that its 2019 ending deferred tax liability is 14,100. Required: 1. Prepare a schedule for Colt to allocate the total 2019 income tax expense to the various components of pretax income. 2. Prepare Colts income tax journal entry at the end of 2019. 3. Prepare Colts 2019 income statement. 4. Prepare Colts 2019 statement of retained earnings. 5. Show the related income tax disclosures on Colts December 31, 2019, balance sheet.
Prior to and during 2019, Shadrach Company reported tax depreciation at an amount higher than the amount of financial depreciation, resulting in a book value of the depreciable assets of 24,500 for financial reporting purposes and of 20,000 for tax purposes at the end of 2019. In addition, Shadrach recognized a 3,500 estimated liability for legal expenses in the financial statements during 2019; it expects to pay this liability (and deduct it for tax purposes) in 2023. The current tax rate is 30%, no change in the tax rate has been enacted, and the company expects to be profitable in future years. What is the amount of the net deferred tax liability at the end of 2019? a. 300 b. 450 c. 1,050 d. 1,350
Below is the Retained Earnings account for the year 2020 for Acadian Corp. Retained earnings, January 1, 2020 $257,600 Add: Gain on sale of investments (net of tax) $41,200 Net income 84,500 Refund on litigation with government, related to the year 2017 (net of tax) 21,600 Recognition of income earned in 2019, but omitted from income statement in that year (net of tax) 25,400 172,700 430,300 Deduct: Loss on discontinued operations (net of tax) 35,000 Write-off of goodwill (net of tax) 60,000 Cumulative effect on income of prior years in changing from LIFO to FIFO inventory valuation in 2020 (net of tax) 23,200 Cash dividends declared 32,000 150,200 Retained earnings, December 31, 2020 $280,100 Instructions a. Prepare a corrected retained earnings statement. Acadian Corp. normally sells investments of the type mentioned above. FIFO inventory was used in 2020 to…
Regine Company computed a pre-tax financial income of P6,000,000 for the year ended December 31, 2020. The following differences are noted between taxable and accounting income:· Nontaxable revenue: P600,000· Nondeductible expense: P200,000· Warranty provision accrued and expensed in 2020 but tax-deductible when paid: P300,000· Excess tax depreciation over accounting depreciation: P250,000· Excess of accounting revenue over tax revenue (timing difference): P200,000Current tax rate for 2020 is 32% while tax rate for 2021 and forward is 30%. How much is the total tax expense? a. 1,744,000 b. 1,699,000 c. 1,789,000 d. 1,792,000
Below is the Retained Earnings account for the year 2025 for Coronado Corp. Retained earnings, January 1, 2025 Add: Gain on discontinued operations (net of tax) Net income Gain on sale of investments (net of tax) Cumulative effect on income of prior years in changing from LIFO to FIFO inventory valuation in 2025 (net of tax) Refund on litigation with government, related to the year 2022 (net of tax) Recognition of income earned in 2024, but omitted from income statement in that year (net of tax) Deduct: Write-off of goodwill (net of tax) Cash dividends declared Retained earnings, December 31, 2025 Retained Earnings, January 1, as Reported CORONADO CORP. Retained Earnings Statement For the Year Ended December 31, 2025 Correction of Error from Prior Period Adjustment for Change in Accounting Principle (Net of Tax) Retained Earnings, January 1, as Adjusted Add V: Net Income /(Loss) Less : Cash Dividends Declared Retained Earnings, December 31 $14,400 170,700 43,600 55,000 Prepare a…
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 current tax expense.