Question 7For each of the following items, indicate whether it would generate a permanent or temporary taxdifference:Use of different depreciation methods for financial reporting andtax reporting purposesThe incurrence of fines for late tax paymentsThe payment of monies as prepayment for services to be receivedin future periods (prepaid asset)The receipt of non-taxable interestThe recognition of warranty expense using the allowance method[Select][Select][Select][Select][Select]

Lets understand the basics. Deferred tax arise when there is temporary difference is arise between…

Answered: each of the following items, indicate…

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter14: Taxes On The Financial Statements

Section: Chapter Questions

Problem 17CE

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1. cont... Listed below are items that are commonly accounted for differently for financial reporting purposes than they are for tax purposes.For each item below, indicate whether it involves: 1. A temporary difference that will result in future deductible amounts and, therefore, will usually give rise to a deferred income tax asset. 2. A temporary difference that will result in future taxable amounts and, therefore, will usually give rise to a deferred income tax liability. 3. A permanent difference. (e)                                                           Installment sales of investments are accounted for by the accrual method for financial reporting purposes and the installment method for tax purposes. (f)                                                           For some assets, straight-line depreciation is used for both financial reporting purposes and tax purposes, but the assets’ lives are shorter for tax purposes. (g)…
1continue.. Listed below are items that are commonly accounted for differently for financial reporting purposes than they are for tax purposes.For each item below, indicate whether it involves: 1. A temporary difference that will result in future deductible amounts and, therefore, will usually give rise to a deferred income tax asset. 2. A temporary difference that will result in future taxable amounts and, therefore, will usually give rise to a deferred income tax liability. 3. A permanent difference. (e)                                                           Installment sales of investments are accounted for by the accrual method for financial reporting purposes and the installment method for tax purposes. (f)                                                           For some assets, straight-line depreciation is used for both financial reporting purposes and tax purposes, but the assets’ lives are shorter for tax purposes. (g)…
1 contiune Listed below are items that are commonly accounted for differently for financial reporting purposes than they are for tax purposes.For each item below, indicate whether it involves: 1. A temporary difference that will result in future deductible amounts and, therefore, will usually give rise to a deferred income tax asset. 2. A temporary difference that will result in future taxable amounts and, therefore, will usually give rise to a deferred income tax liability. 3. A permanent difference. (e)                                                           Installment sales of investments are accounted for by the accrual method for financial reporting purposes and the installment method for tax purposes.(f)                                                           For some assets, straight-line depreciation is used for both financial reporting purposes and tax purposes, but the assets’ lives are shorter for tax purposes.(g)…
5. How do you call a deductible temporary difference? a. Current tax asset. b. Deferred tax asset. c. Current tax liability. d. Deferred tax liability.
1. What amount of permanent difference between book income and taxable income existed at year end?a. 520,000b. 360,000c. 800,000d. 280,0002. What amount of current tax expense should be reported? a. 786,000b. 510,000c. 750,000d. 678,0003. What amount of income tax payable should be reported?a. 498,000b. 606,000c. 330,000d. 570,0004. What amount of total tax expense should be reported?a. 714,000b. 726,000c. 642,000d. 594,000
Ma3. Outline the differences between IRC Section 311 and 336/337 for non-liquidating and liquidating distributions. In your answers, include the consequences for the tax attributes (E&P, recapture, installment sales)
Question 1: Why do deferred tax assets or deferred tax liabilities arise? Explain your answer with a suitable example. Question 2: Will the existence of unused tax losses always lead to the recognition of deferred tax assets? Explain your answer with suitable example. Question 3: Do the liabilities and assets that are generated by using the 'balance sheet method' of accounting for tax appear to be consistent with the definition and recognition criteria of assets and liabilities promulgated within the Conceptual Framework? Question 4: Under what conditions can deferred tax assets be offset against deferred tax liabilities? Question 5: Critically examine the disclosures made by an Australian Securities Exchange (ASX) listed company in its latest financial statements and associated notes regarding income tax issues. While every company will have unique tax matters and position, your discussion should highlight the following: Identify the income tax expense (income) shown in…
(Identify Temporary or Permanent Differences) Listed below are items that are commonly accounted for differently for financial reporting purposes than they are for tax purposes.InstructionsFor each item below, indicate whether it involves:(1) A temporary difference that will result in future deductible amounts and, therefore, will usually give rise to a deferred income tax asset.(2) A temporary difference that will result in future taxable amounts and, therefore, will usually give rise to a deferred income tax liability.(3) A permanent difference.Use the appropriate number to indicate your answer for each.(a) ______ The MACRS depreciation system is used for tax purposes, and the straight-line depreciation method is used for financial reporting purposes for some plant assets.(b) ______ A landlord collects some rents in advance. Rents received are taxable in the period when they are received.(c) ______ Expenses are incurred in obtaining tax-exempt income.(d) ______ Costs of guarantees…
Question 1 What is the main principle of tax-effect accounting as outlined in AASB 112/IAS 12? Answer: XX Question 2 How are the current and future tax consequences of transactions accounted for? Answer: XX Question 3 What is an ‘exempt income’ and how does it affect the calculation or recovery of carry‐forward tax losses? Answer: XX Question 4 Calculation of Current Tax Liability (CTL) SydMel Ltd commences operations on 1 July 2020. One year later, on 30 June 2021, the entity prepares its first statement of comprehensive income and its first statement of financial position. The statements are prepared before considering taxation. The following information is available. Statement of Profit or Loss and other Comprehensive Income For the year ended 30 June 2021 Gross Profit $510,000 Salaries expenses (210,000) Rent expense (52,000) Long service leave expenses (50,000) Depreciation expense - Plant (30,000) Bad debt expense (19,000)…
1. Which statement is true about intraperiod tax allocation? a. It arises because certain revenue and expense items appear in the income statement either before or after they are included in the tax return b. It is required for the cumulative effect of accounting changes but not for prick period adjustments c. The purpose is to allocate income tax expense evenly over a number of accounting periods d. The purpose is to relate the income tax expense to the items which affect the amount of tax 2. Which temporary difference would result in a deferred tax asset? a. Tax penalty or surcharge b. Dividend received on share investment c. Excess tax depreciation over accounting depreciation d. Rent received in advance included in taxable income but deferred for financial accounting 3. Which temporary difference would result in a deferred tax liability? a. Interest revenue on municipal bonds b. Accrual of warranty expense c. Excess tax depreciation over…
a.) For the current year temporary differences existed between the financial statement carrying amounts and the tax basis of the following: Carrying Amount Tax Basis Future Taxable or(Deductible)Amount Buildings andequipment $ 50,000,000 $ 36,000,000 $ 14,000,000 Prepaid insurance 3,000,000 0 3,000,000 Liability-losscontingency 12,000,000 0 (12,000,000 ) (b.) No temporary differences existed at the beginning of the year. (c.) Pretax accounting income was $200,000,000 and taxable income was $110,000,000 for the year and the tax rate is 40%. Permanent differences are the cause of any difference between pretax accounting income and taxable income that are not due to temporary differences. Required:Prepare the journal entry to record the tax provision for the current year.
H6. 13 A claim for refund is a request for reimbursement of the overpayment of taxes paid in previous years. To be valid, a claim for refund must include which of the following features? Select one: a. The claim for refund can be made by telephone or in writing. b. The claim for refund must be signed only by the taxpayer c. The claim for refund must be filed within the set statute of limitations d. All of the above are correct Please explain also wrong options and explain with details

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