Hale Corporation uses installment sales method in revenue recognition. The following information is providedin the records of Hale:20X120X2P1,250,000 P2,350,000780,00020X3SalesCost of SalesP1,500,000900,0001,057,500Cash CollectionsFrom 20x1 SalesFrom 20x2 SalesFrom 20x3 Sales50,00070,000230,000670,000365,000124,000REQUIRED: Compute for the following:1. Adjusted deferred gross profit balance in 20x12. Realized gross profit in 20x13. Adjusted deferred gross profit balance in 20x24. Total realized gross profit in 20x2s5. Adjusted deferred gross profit balance in 20X36. Total realized gross profit in 20x37. Installment receivable balance as of 20x3

Name: Hale Corporation uses installment sales method in revenue recognition
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Description: Hale Corporation uses installment sales method in revenue recognition. The following information is providedin the records of Hale:20X120X2P1,250,000 P2,350,000780,00020X3SalesCost of SalesP1,500,000900,0001,057,500Cash CollectionsFrom 20x1 SalesFro

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Hale Corporation uses installment sales method in revenue recognition. The following information is pro in the records of Hale: 20X3 P2,350,000 1,057,500 20X1 20X2 P1,500,000 900,000 P1,250,000 780,000 Sales Cost of Sales Cash Collections From 20x1 Sales From 20x2 Sales 670,000 365,000 124,000 50,000 70,000 230,000 From 20x3 Sales REQUIRED: Compute for the following: 1. Adjusted deferred gross profit balance in 20x1 2. Realized gross profit in 20x1 3. Adjusted deferred gross profit balance in 20x2

Hale Corporation uses installment sales method in revenue recognition. The following information is pro in the records of Hale: 20X3 P2,350,000 1,057,500 20X1 20X2 P1,500,000 900,000 P1,250,000 780,000 Sales Cost of Sales Cash Collections From 20x1 Sales From 20x2 Sales 670,000 365,000 124,000 50,000 70,000 230,000 From 20x3 Sales REQUIRED: Compute for the following: 1. Adjusted deferred gross profit balance in 20x1 2. Realized gross profit in 20x1 3. Adjusted deferred gross profit balance in 20x2

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter3: Taxes On The Financial Statements

Section: Chapter Questions

Problem 2P

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Karma Inc. has installment sales to customers and recognizes the full installment sales as revenues for accounting purposes although it receives cash payments from customers in later periods. For tax purposes, the installment sales are taxable when cash payments are received. Amounts for pretax accounting income which included the installment sales, installment sales reported on income statement, and cash payments received from installment sales in year 1, year 2, and year 3 are as follows: Year 1 Year 2 Year 3 Pretax accounting Income $800,000 $500,000 $600,000 Installment sales income on 200,000 0 0 income statement Cash payments received from 80,000 50,000 70,000 installment…
8. Huff Corp. began operations on January 1, 20x8. Huff recognizes revenues from all sales under the accrual method for financial reporting purposes and appropriately uses the installment method for income tax purposes. Huff’s gross margin on installment sales under each method was as follows: Year Accrual method Installment method 20x8 P800,000 P300,000 20x9 1,300,000 700,000 Enacted income tax rates area 30% for 20x9 and 25% thereafter. There are no other temporary differences. In Huff’s December 31, 20x9, balance sheet, the deferred income tax liability should be______.
The following are the information related to instalment sales made by Bimbo Co.:20X1 20X2Sales P200,000 P320,000Cost of Sales 160,000 224,000Gross profit rate 20% 30%Installment receivable, 20x1 90,000 30,000Installment receivable, 20x2 144,000During 20x2, Bimbo Co. has repossessed a property sold to a defaulted customer in 20x1 for P25,000. Prior to repossession, P5,000 were collected from the buyer. The repossessed property has an estimated resale price of P22,000. Reconditioning costs amount to P3,000. The normal profit margin is 30%.REQUIRED: 4. Compute the gain or loss on repossession ____________5. Compute the total realized gross profit in 20x2 ____________6. Net income recognized in 20x2 ____________
Lewes Company appropriately uses the installment sales method for tax purposes and the accrual method for revenue recognition for accounting purposes. Pertinent data at December 31, 2016, the close of the first year of operations, are as follows: Revenue Recognized Revenue Recognized Customer for Accounting Purposes for Tax Purposes Lowe's Builders $200,000 $100,000 Top Down Plumbing 500,000 350,000 Glass Plus Windows 600,000 350,000 Lewes's tax rate is 30%. What amount should be included in the deferred tax account at December 31, 2016 for these installment sales?
Daze Corporation appropriately uses the installment-sales method of accounting to recognize income in its financial statements. The following information is available for 2020 and 2021. 2020 2021 Installment sales $800,000 $1,000,000 Cost of installment sales 480,000 650,000 Cash collections on sales of 2020 300,000 500,000 Cash collections on sales of 2021 -0- 400,000 Compute the amount of realized gross profit recognized in each year.
Beckett Corporation has nexus with States A and B. Apportionable income for the year totals $1,190,000 . Beckett's apportionment factors for the year use the following data. Compute Beckett's B taxable income for the year; B uses a three-factor apportionment formula with a double-weighted sales factor. State AState BTotalSales$1,428,000$856,800$2,284,800Property$238,000$0 $238,000Payroll$357,000$0 $357,000
Plantito Company began operations on January 1, 2019 and appropriately uses the installment method of accounting. The following data are available for 2019 and 2020.2019 2020Installment Sales P1,200,000 P1,500,000Cash collections from:2019 sales P400,000 P500,0002020 sales P600,000Gross Profit on sales 30% 40%The realized gross profit for 2020 isa. P240,000 c. P440,000b. P390,000 d. P600,000
Greenville Industries uses the accrual basis to account for all sales transactions. Sales for 2022 total $590,000. Included in this amount is $80,000 in receivables from sales on installment. Installment sales are considered revenue for book purposes, but not for tax purposes. Operating expenses total $180,000 and are treated the same for book and tax purposes. What is Greenville's book basis in the installment sale receivable? Group of answer choices $40,000 $80,000 $180,000 $0
An entity was offering premium as a sales promotion scheme and that during the year it purchased 10,000 premiums for P20 each. Customers need to remit 10 boxes and P5 to redeem one premium. Assume there were no redemptions during the first year of the promotion, which of the following statements would be correct if it uses the revenue approach? a. The entity will report an inventory of premiums at the net cost of P15. Tb. he entity will report an estimated liability equal to the premium expense. c. None of the other choices are correct. Td. he entity will not report any expense since there were no redemption. e. No accounting liability shall be recognized since there were no redemptions.
DEF Co. reported taxable income of P8M in its income tax return for the 1st year of operations. The entity revealed the following temporary differences between financial income and taxable income for the year:Tax depreciation in excess of book depreciation, P800,000Accrual for product liability claim in excess of actual claim, P1,200,000Reported installment sales income in excess of taxable installment sales income, P2,600,000Income tax rate, 30%Compute for the deferred tax expense for the 1st year
10. Sheridan Corp. prepared the following reconciliation of income per books with income per tax return for the year ended December 31, 2021: Book income before income taxes $ 2630000 Add temporary difference Construction contract revenue which will reverse in 2022 233000 Deduct temporary difference Depreciation expense which will reverse in equal amounts in each of the next four years ( 943200) Taxable income $ 1919800 Sheridan's effective income tax rate is 25% for 2021. What amount should Sheridanreport in its 2021 income statement as the current provision for income taxes? A) $ 479950 B) $ 657500 C) $ 715750 D) $ 58250
( crane co at the end of 202-itsfirst year of of operations prepared a reconciliation between pertax financial income and taxable income as follows; Pertax financial income $1170000 Estimated litigation expensense 2950000 Installment sales (2360000) Taxable income 1760000 ( crane co at the end of 202-itsfirst year of of operations prepared a reconciliation between pertax financial income and taxable income as follows; Pertax financial income $1170000 Estimated litigation expensense 2950000 Installment sales (2360000) Taxable income 1760000 The estimated litigation expense of $2950000 will be deductible in 2022 when it is expected to be paid. The gross profit from the installment sales will be realized in the amount of 1180000 in each of the next two years. The estimated libility for litigation is classified as noncurrent and the…