Prepare the journal entries to record 2020 income taxes (current and deferred). (Credit account titles are automatically indentedwhen the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for theamounts.)Account Titles and ExplanationDebitCredit(To record current tax expense.)(To record deferred tax expense.) Prior to 2019, the accounting income and taxable income for Sheffield Corporation were the same. On January 1, 2019, thecompany purchased equipment at a cost of $1,116,000. For accounting purposes, the equipment was to be depreciated over sixyears using the straight-line method and no residual value. For income tax purposes, the equipment was subject to a CCA rate of30% (half-year rule applies for 2019). Sheffield's income before tax for accounting purposes for 2020 was $13,000,000. Thecompany was subject to a 20% income tax rate for all applicable years and anticipated profitable years for the foreseeable future.Sheffield follows IFRS.Calculate taxable income and taxes payable for 2020.Taxable incomeIncome taxes payable$eTextbook and MediaList of Accounts%24%24

The question is based on the concept of Taxation.

Answered: Calculate taxable income and taxes…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter26: Tax Practice And Ethics

Section: Chapter Questions

Problem 32P

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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
Ironwood Corporation has ordinary taxable income of $65,000 in 2019, and a short-term capital loss of $15,000. What is the corporation's tax liability for 2019? $7,500 $5,250 $10,500 $13,650 None of the above
How do the all events and economic performance requirements apply to the following transactions by an accrual basis taxpayer? a. The company guarantees its products for six months. At the end of 2019, customers had made valid claims for 600,000 that were not paid until 2020. Also, the company estimates that another 400,000 in claims from 2019 sales will be filed and paid in 2020. b. The accrual basis taxpayer reported 200,000 in corporate taxable income for 2019. The state income tax rate was 6%. The corporation paid 7,000 in estimated state income taxes in 2019 and paid 2,000 on 2018 state income taxes when it filed its 2018 state income tax return in March 2019. The company filed its 2019 state income tax return in March 2020 and paid the remaining 5,000 of its 2019 state income tax liability. c. An employee was involved in an accident while making a sales call. The company paid the injured victim 15,000 in 2019 and agreed to pay the victim 15,000 a year for the next nine years.

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Calculate taxable income and taxes payable for 2020. Taxable income Income taxes payable eTextbook and Media List of Accounts %24 %24