For calendar year 2024, Kane Corp. reported depreciation of $1,600,000 in its income statement. On its 2024 income tax return, Kane reported depreciation of $2,400,000. Kane's income statement also included $300,000 accrued warranty expense that will be deducted for tax purposes when paid. Kane's taxable income was $5,200,000, and the enacted tax rates are 21% for 2024 and 24% for 2025 and thereafter. The depreciation difference and warranty expense will reverse over the next three years as follows: 14 15 16 2025 2026 2027 C. d. Depreciatio $1,212,000 $1,665,000 $1,750,000 n B 9 10 11 12 Kane previously had no deferred taxes, and these were Kane's only temporary differences. In Kane's 2024 income statement, income tax expense should be 13 a. $987,000 b. Difference $320,000 280,000 200,000 $800,000 Warranty Expense $60,000 100,000 140,000 $300,000

For calendar year 2024, Kane Corp. reported depreciation of $1,600,000 in its income statement. On its 2024 income tax return, Kane reported depreciation of $2,400,000. Kane's income statement also included $300,000 accrued warranty expense that will be deducted for tax purposes when paid. Kane's taxable income was $5,200,000, and the enacted tax rates are 21% for 2024 and 24% for 2025 and thereafter. The depreciation difference and warranty expense will reverse over the next three years as follows: 14 15 16 2025 2026 2027 C. d. Depreciatio $1,212,000 $1,665,000 $1,750,000 n B 9 10 11 12 Kane previously had no deferred taxes, and these were Kane's only temporary differences. In Kane's 2024 income statement, income tax expense should be 13 a. $987,000 b. Difference $320,000 280,000 200,000 $800,000 Warranty Expense $60,000 100,000 140,000 $300,000

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter14: Taxes On The Financial Statements

Section: Chapter Questions

Problem 4BCRQ

See similar textbooks

Similar questions

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
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.
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
Quince Corporation has taxable income of $485,000 for its calendar tax year. Calculate the corporation's income tax liability for 2019 before tax credits. $________________