Bramble Inc. reports the following incomes (losses) for both book and tax purposes (assume the carryback provision is used where possible): Accounting Income Year (Loss) Tax Rate 2017 $137,000 25 % 2018 107,000 25 % 2019 (314,000 ) 30 % 2020 52,000 30 % The tax rates listed were all enacted by the beginning of 2017.
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- LO.3, 4, 5 Contrast the income taxation of individuals and C corporations as to: a. Alternative minimum tax. b. Dividend income. c. Qualified business income deduction of 20 percent. d. Use of the cash method of accounting. e. Accounting period used for tax purposes. f. Applicable tax rates. g. Due date of the tax return.Intel-period Tax Allocation Chris Green, CPA, is auditing Rayne Co.s 2019 financial statements. For the year ended December 31, 2019, Rayne is applying GAAP for income taxes. Raynes controller, Dunn, has prepared a schedule of all differences between financial statement and income tax return income. Dunn believes that as a result of pending legislation, the enacted tax rate at December 31, 2019, will be increased for 2020. Dunn is uncertain which differences to include and which rates to apply in computing deferred taxes. Dunn has requested an overview of GAAP from Green. Required: Prepare a brief memo to Dunn from Green that identifies the objectives of accounting for income taxes, defines temporary differences, explains how to measure deferred tax assets and liabilities, and explains how to measure deferred income tax expense or benefit.LO.2 Oak Corporation has the following general business credit carryovers. If the general business credit generated by activities during 2019 equals 36,000 and the total credit allowed during the current year is 60,000 (based on tax liability), what amounts of the current general business credit and carryovers are utilized against the 2019 income tax liability? What is the amount of unused credit carried forward to 2020?
- Rhodes Corporations financial statements are shown after part f. Suppose the federal-plus-state tax corporate tax is 25%. Answer the following questions. a. What is the net operating profit after taxes (NOPAT) for 2020? b. What are the amounts of net operating working capital for both years? c. What are the amounts of total net operating capital for both years? d. What is the free cash flow for 2020? e. What is the ROIC for 2020? f. How much of the FCF did Rhodes use for each of the following purposes: after-tax interest, net debt repayments, dividends, net stock repurchases, and net purchases of short-term investments? (Hint: Remember that a net use can be negative.) Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)Multiple Temporary Differences Wilcox Company has prepared the following reconciliation of its pretax financial income with its taxable income for 2019: At the beginning of 2019, Wilcox had a deferred tax liability of 495. The current tax rate is 30%, and no change in the tax rate has been enacted for future years. At the end of 2019, Wilcox anticipates that actual warranty costs will exceed estimated warranty expense by 100 next year and that financial depreciation will exceed tax depreciation by 1,800 in future years. Wilcox has earned income in all past years and expects to earn income in the future. Required: 1. Prepare Wilcoxs income tax journal entry at the end of 2019. 2. Prepare the lower portion of Wilcoxs 2019 income statement. 3. Show how the income tax items are reported on Wilcoxs December 31, 2019, balance sheet.x Company reports the following pretax income (loss) for both book and tax purposes. Year. Pretax income tax rate 2018 120,000 20% 2019 93,000 20% 2020. (82,000) 25% 2021 110,000 25% The tax rates listed were enacted by the beginning of 2018 Prepare the journal entries for years 2018-2021 to record income tax expense (benefit) and 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 half of the benefits of the loss carryforward will not be realized.
- x Company reports the following pretax income (loss) for both book and tax purposes. Year. Pretax income tax rate 2018 120,000 20% 2019 93,000 20% 2020. (82,000) 25% 2021 110,000 25% The tax rates listed were enacted by the beginning of 2018 Prepare the income tax section of the 2020 income statment beginning with the line "operating loss before income taxes" Prepare the income tax section of the 2021 income statment beginning with the line "operating loss before income taxes" I have the journal entries I need the income statment -prepare journal entries for years 2018-2021 to record income tax expense (benefit) and 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 half of the benefits of the loss carryforward will not be realized.Q1. Taxable income and applicable tax rates for C.J. Company’s first four years are shown below. For each year, taxable income and pretax financial income are identical. In the table below, taxable income is before any consideration of NOL carryback and carryforward. The enacted tax rates were known at 1/1/2018. Taxable Income Enacted tax rate 2018 $200 20% 2019 ($300) 15% 2020 $340 25% 2021 $210 25% Now assume that C.J. opted to carryback its 2019 NOL and carryforward any unused NOL to future years. Complete the table below for 2018 through 2021 to show the amount of income tax payable to the IRS or the refund due from the IRS for each year. Put your answer in the table below. Show tax payable as a positive number and tax refund as a negative number. Year Tax…B10. profile-image Neasha Corporation reported the following income/loss before taxes on the tax return: There are no other timing or permanent differences between books and tax. Pretax Financial Income Enacted Tax Rates 2016 $100,000 30% 2017 ($1,200,000) 30% 2018 $900,000 40% 2019 $500,000 45% Assuming that Neasha elects to use the carryback provision, prepare the journal entry for 2017 and 2018. Assume that any deferred tax asset recognized is more likely than not to be realized. Can you tell me how to calculate the NOL carryback and carryforward for this problem? Thanks!
- 1) The estimate of current tax made by Boo Ltd for the year ended 31 December2019 was £15,000 different from the actual tax liability. This resulted in a debitbalance in the trial balance at 31 December 2020.The current tax liability for the year to 31 December 2020 is estimated to be£275,000.What is the current tax expense in the statement of profit or loss for the yearended 31 December 2020?a) £15,000b) £290,000c) £275,000d) £260,000 2) A company’s trade payables days and trade receivables days are 60 daysand 30 days, respectively.The sales and purchase information for the year was as follows:Sales Purchases£m £mCash 27 10Credit 35 18Total 62 28What was the trade receivables and trade payables balances at the year end?a) £5.10m and £4.60mb) £2.21m and £1.64mc) £5.75m and £1.48md) £2.88m and £2.96m Please solve question 1 and 2independent problems: 1. ABC Company reported in its 2019 current tax expense at P 5,530,000. The following changes in ABC asset's and liabilities are as follows: Deferred tax asset 12/31/2019-200,000 12/31/2018-500,000 Deferred tax liability 12/31/2019-420,000 12/31/2018-600,000 Income tax payable 12/31/2019-850,000 12/31/2018-200,000 The deferred tax liability was caused by accelerated depreciation and the deferred tax asset is for rentals received in advance. How much is ABC's total income tax expense? 2. ABC Inc. began operations on July 1,2019. The company recognizes income from long term construction contracts under the percentage of completion method in its financial statements and under the cost recovery method for income tax purposes. Income under each are as follows: 2019 Cost recovery- P 0 % of completion- P 700,000 2020 Cost recovery- P 800,000 % of completion- P 1,280,000 2021 Cost recovery- P 1,350,000 % of completion- P 1,700,000 The income tax rate was 32% for…PROBLEM 2 Complex Company reported the following information relating to income before the 30% tax for accounting purposes: 2021 P 2,000,000 2022 3,000,000 2023 4,000,000 2024 5,000,000 In 2021, Complex Company recognized doubtful accounts of P100,000. Such accounts were considered worthless or uncollectible in 2022, P40,000 and 2023, P60,000. Analysis of the tax and book records disclosed P120,000 in unearned rent income on December 31, 2021 that has been recognized as taxable income in 2021 when the cash was received. Also, on December 31, 2021, estimated warranty cost of P300,000 had been recognized as expense on the books in 2021 when the product sales were made but is not deductible for tax purposes until paid. The unearned rent income on December 31, 2021 is realized and the actual warranty payments were made as follows: Rent income per books Actual warrant payments 2022 P 40,000 P…