For Control Furniture Co., LIFO reserve in Year 2006 LIFO reserve in Year 2005 Tax Rate is 35%. To restate Year 2006 LIFO inventories to a FIFO basis, we use the following analytical entry: A) Inventories Deferred Tax Payable Retained Earnings B) Inventories Deferred Tax Payable Retained Earnings C) Inventories Deferred Tax Payable Retained Earnings D) Inventories Deferred Tax Payable Retained Earnings $91 million $82 million 91 91 91 91 31.85 59.15 35.65 55.35 38.96 52.04 32.85 58.15

For Control Furniture Co., LIFO reserve in Year 2006 LIFO reserve in Year 2005 Tax Rate is 35%. To restate Year 2006 LIFO inventories to a FIFO basis, we use the following analytical entry: A) Inventories Deferred Tax Payable Retained Earnings B) Inventories Deferred Tax Payable Retained Earnings C) Inventories Deferred Tax Payable Retained Earnings D) Inventories Deferred Tax Payable Retained Earnings $91 million $82 million 91 91 91 91 31.85 59.15 35.65 55.35 38.96 52.04 32.85 58.15

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 9MC: Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and...

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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)
Sammie reported the following for the taxable year 2022. Vatable ending inventory for March is P240,000, of which the related VAT paid is negligible. 1. How much is the business tax payable for the first quarter? 2. How much is the business tax payable for the third quarter?
The valuation allowance. For the deferred tax asset increased from $21,818,084 to $28,946,363 between 2007 and 2008, how did this change affect the comoany'S net income?
For the year ended December 31, 2006, Grim Company's pretax financial income was P2,000,000 and its taxable income was P1,500,000. the difference is due to the following:Interest income as savings deposit, 700,000Premium expense on keyman life insurance, (200,000)Total 500,000The income tax rate is 35%. In its 2006 income statement, what amount should Grim report as current provision for income tax expense?a. 525,000 b. 700,000 c. 595,000 d. 770,000
Prey Ltd accountant has estimated current tax of P50 000 based on the current profit. The income tax value of the non- current assets are P75 000 and the carrying amount of non-current assets as at 31 December 2020 is P90 000.Tax rate is 22%.1 Using information given above, calculate the deferred tax for the year ended 31 December 2020.2 Calculate the figure of the tax expense that should appear in the statement of profit or loss.3 State how should the deferred tax and current tax should be classified in the statement of financial position.
If the current year tax rate is 20% and a company estimates next year's tax rate will be 25%, income tax payable is calculated using the 20% rate and the desired ending balances of the deferred tax accounts are calculated using the 25% rate. • True O False
Zimt AG presents its fi nancial statements in accordance with US GAAP. In 2007, Zimtdiscloses a valuation allowance of $1,101 against total deferred tax assets of $19,201. In2006, Zimt disclosed a valuation allowance of $1,325 against total deferred tax assets of$17,325. Th e change in the valuation allowance most likely indicates that Zimt’s:A . deferred tax liabilities were reduced in 2007.B . expectations of future earning power has increased.C . expectations of future earning power has decreased.
Teal Company reports pretax financial income of $72,600 for 2020. The following items cause taxable income to be different than pretax financial income. 1. Depreciation on the tax return is greater than depreciation on the income statement by $17,200. 2. Rent collected on the tax return is greater than rent recognized on the income statement by $20,300. 3. Fines for pollution appear as an expense of $9,900 on the income statement. Teal’s tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2020. (a) Compute taxable income and income taxes payable for 2020. Taxable income $enter a dollar amount Income taxes payable $enter a dollar amount
Grouper Company reports pretax financial income of $68,400 for 2020. The following items cause taxable income to be different than pretax financial income. 1. Depreciation on the tax return is greater than depreciation on the income statement by $17,000. 2. Rent collected on the tax return is greater than rent recognized on the income statement by $21,000. 3. Fines for pollution appear as an expense of $10,300 on the income statement. Grouper’s tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2020. (a) Compute taxable income and income taxes payable for 2020. Taxable income $enter a dollar amount Income taxes payable $enter a dollar amount (b) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020. (Credit account titles are…
Jackie reported the following for the taxable year 2022. Vatable ending inventory for March is P240,000, of which the related VAT paid is negligible. How much is the business tax payable for the October?
Wheaton Inc. reported the following results for its first three years of operations: 2019 Income (before income taxes) $ 40,000 2020 Loss (before income taxes) (300,000) 2021 Income (before income taxes) 400,000 There were no permanent or reversible differences during these three years. Assume an income tax rate of 30% for 2019 and 2020, and 40% for 2021, and that any tax loss carryforward is more likely than not to be realized. If Wheaton elects to use the carryback provisions, what after tax net income (loss) is reported for 2020? Select one: a. $(300,000). b. $(196,000). c. $(184,000). d. $0. e. none of the above.
ABC Corporation provides you with the following information for the 2020 tax year, which was the company’s first year of operation:Book Income Before Taxes $100,000,000Book Depreciation $ 5,000,000MACRS Depreciation $ 7,500,000Foreign Sourced Income $ 40,000,000Assume a federal tax rate of 21%, disregard state taxes.a. Calculate federal taxable income.b. Calculate the federal tax payable and federal tax expense.c. Given your answer above in b., is a deferred tax asset or a deferred tax liability created? Provide the journal entry needed to reflect this.