For calendar year 2016, sigma had a depreciation of 1,200,000 in its income statement. On its 2016 income tax return, reported depreciation of 1,800,000. In income statement also included 225,000 accrued warranty expense that will be deducted for tax purposes when paid. Tax rates -30% for 2016 and 2017 , & 24% for 2018 and 2019. The depreciation difference and warranty expense will reverse over the next 3 years as follows: Depreciation Difference Warranty Expense 2017=240,000,45,000 2018-210,000, 75,000 2019= 150,000, 105,000 600,000, 225,000 These were its only temporary differences. In 2016 income statement, the deferred portion of its provision for income taxes should be?

For calendar year 2016, sigma had a depreciation of 1,200,000 in its income statement. On its 2016 income tax return, reported depreciation of 1,800,000. In income statement also included 225,000 accrued warranty expense that will be deducted for tax purposes when paid. Tax rates -30% for 2016 and 2017 , & 24% for 2018 and 2019. The depreciation difference and warranty expense will reverse over the next 3 years as follows: Depreciation Difference Warranty Expense 2017=240,000,45,000 2018-210,000, 75,000 2019= 150,000, 105,000 600,000, 225,000 These were its only temporary differences. In 2016 income statement, the deferred portion of its provision for income taxes should be?

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter6: Deductions And Losses: In General

Section: Chapter Questions

Problem 56P

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Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and taxable income for 2020. The prior period adjustment was the result of an error in calculating bad debt expense for 2019. The current tax rate is 30%, and no change in the tax rate has been enacted for future years. When the company applies intraperiod income tax allocation, the prior period adjustment will be shown on the: a. income statement at 12,000 b. income statement at 8,400 (net of 3,600 income taxes) c. retained earnings statement at 12,000 d. retained earnings statement at 8,400 (net of 3,600 income taxes)
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.
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