i need the answer quickly Information for Kent Corporation for the year 2024:Reconciliation of pretax accounting income and taxable income:Pretax accounting incomePermanent differencesTemporary difference-depreciationTaxable income$ 178,700(15,200)163,500(12,500)$ 151,000Cumulative future taxable amounts all from depreciation temporary differences:As of December 31, 2023As of December 31, 2024$ 14,200$ 26,700The enacted tax rate was 25% for 2023 and thereafter.What should be the balance in Kent's deferred tax liability account as of December 31, 2024?

Deferred tax liability : As the name suggests it is a tax liability for the tax payer which is…

Information for Kent Corporation for the year 2024: Reconciliation of pretax accounting income and taxable income: Pretax accounting income Permanent differences Temporary difference-depreciation Taxable income $ 178,700 (15,200) 163,500 (12,500) $ 151,000

Information for Kent Corporation for the year 2024: Reconciliation of pretax accounting income and taxable income: Pretax accounting income Permanent differences Temporary difference-depreciation Taxable income $ 178,700 (15,200) 163,500 (12,500) $ 151,000

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 4E: Single Temporary Difference: Multiple Rates At the end of 2019, Fulhage Company reported taxable...

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Temporary and Permanent Differences Lin has just completed its first year of operations and has a number of differences between its pretax financial income and taxable income. The differences at the end of 2019 are as follows: a. Lin recorded 7,000 of interest revenue on municipal bonds during 2019. b. 15,000 of accrual-basis sales were recognized in income during 2019. They are expected to be received in cash during January 2020. c. Depreciation on machinery totaled 28,000 using straight-line depreciation for financial statements. Lins tax accountant recorded 36,000 of depreciation on the companys tax return. d. Lin was fined 3,000 for violating certain labor laws during 2019. Lin paid the fine during 2019 and agreed to ensure future violations would not occur. e. Bryant Corporation has agreed to rent space from Lin in 2020. In December 2019, Lin received 7,500 from Bryant in advance for rent. f. For 2019, Lin reported 9,500 of warranty expense on its income statement. The companys warranty liability at the end of 2019 was 6,250. Lin expects additional warranty costs to be paid during 2020. Required: 1. For each item, determine if it results in a temporary or permanent difference. If the item results in a temporary difference, determine if it results in a deferred tax asset or deferred tax liability. 2. For each item, determine if it initially results in pretax financial income being greater than or less than taxable income. 3. Next Level Discuss why permanent differences do not impact future periods taxable income and how these differences affect tax rates.
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.
Single Temporary Difference: Multiple Rates At the end of 2019, Fulhage Company reported taxable income of 9,000 and pretax financial income of 10,600. The difference is due to depreciation for tax purposes in excess of depreciation for financial reporting purposes. The income tax rate for the current year is 40%, but Congress has enacted tax rates of 35% for 2020 and 30% for 2021 and beyond. Fulhage has calculated the excess of its financial depreciation over its tax depreciation for future years as follows: 2020, 600; 2021, 700; and 2022, 300. Prior to 2019, the company had no deferred tax liability or asset. Required: Prepare Fulhages income tax journal entry at the end of 2019.
Interperiod Tax Allocation Peterson Company has computed its pretax financial income to be 66,000 in 2019 after including the effects of the appropriate items from the following information: Petersons accountant has prepared the following schedule showing the future taxable and deductible amounts at the end of 2019 for its three temporary differences: At the beginning of 2019, Peterson had a deferred tax liability of 12,540 related to the depreciation difference and 4,710 related to the accrual-basis sales difference. In addition, it had a deferred tax asset of 14,850 related to the warranty difference. The current tax rate is 30%, and no change in the tax rate has been enacted for future years. Required: 1. Compute Petersons taxable income for 2019. 2. Prepare Petersons income tax journal entry for 2019 (assume no valuation allowance is necessary). 3. Next Level Identify the permanent differences in Items 1 through and explain why you did or did not account for them as deferred tax items in Requirement 2.
Deferred Tax Liability: Depreciation Gire Company began operations at the beginning of 2019 at which time it purchased a depreciable asset for 60, 000. For 2019 through 2022, the asset was depreciated on the straight-line basis over a 4-year life (no residual value) for financial reporting. For income tax purposes, the asset was depreciated using MACRS (200%, 3-year life). For 2019 through 2022, Gire reported pretax financial income and taxable income of the following amounts (the differences are due solely to the depreciation temporary differences): Over the entire 4-year period, Gire was subject to an income tax of 30%, and no change in the tax rate had been enacted for future years. Required: 1. Prepare a schedule that shows for each year, 2019 through 2022, the (a) MACRS depreciation, (b) straight-line depreciation, (c) annual depreciation temporary difference, and (d) accumulated temporary difference at the end of each year. 2. Prepare Gires income tax journal entry at the end of (a) 2019, (b) 2020, (c) 2021, and (d) 2022. (Round to the nearest dollar.) 3. Prepare the lower portion of Gires income statement for (a) 2019, (b) 2020, (c) 2021, and (d) 2022.
Turnip Company purchased an asset at a cost of 10,000 with a 10-year life during the current year. Turnip uses differing depreciation methods for financial reporting and income tax purposes. The depreciation expense during the current year for financial reporting is 1,000 and for income tax purposes is 2,000. Turnip is subject to a 30% enacted future tax rate. Prepare a schedule to compute Turnips (a) ending future taxable amount, (b) ending deferred tax liability, and (c) change in deferred tax liability (deferred tax expense) for the current year.
Multiple Temporary Differences Vickers Company reports taxable income of 4,500 for 2019. Vickers has two temporary differences between pretax financial income and taxable income at the end of 2019. The first difference is expected to result in taxable amounts totaling 2,470 in future years. The second difference is expected to result in deductible amounts totaling 1,360 in future years. Vickers has a deferred tax asset of 372 and a deferred tax liability of 690 at the beginning of 2019. The current tax rate is 30%, and no change in the tax rate has been enacted for future years. Vickers has positive, verifiable evidence of future taxable income. Required: Prepare Vickerss income tax journal entry at the end of 2019.
Deferred Tax Liability: Depreciation At the beginning of 2019, its first year of operations, Cooke Company purchased an asset for 100,000. This asset has an 8-year economic life with no residual value, and it is being depreciated by the straight-line method for financial reporting purposes. For tax purposes, however, the asset is being depreciated using the MACRS (200%, 5-year life) method. During 2019, Cooke reported pretax financial income of 51,500 and taxable income of 44,000. The depreciation temporary difference caused the difference between the two income amounts. The tax rate in 2019 was 30%, and no change in the tax rate had been enacted for future years. Required: 1. Prepare a schedule that shows for each year, 2019 through 2026, (a) MACRS depreciation, (b) straight line depreciation, (c) the annual depreciation temporary difference, and (d) the accumulated temporary difference at the end of each year. 2. Prepare a schedule that computes for each year, 2019 through 2026, (a) the ending deferred tax liability and (h) the change in the deferred tax liability. 3. Prepare Cookes income tax journal entry at the end of 2019. 4. Next Level Explain what happens to the balance of the deferred tax liability at the end of 2019 through 2026.
Subject :- Account At the end of 2024, its first year of operations, Blossom Company prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income $2,890,000 Estimated litigation expense 3890000 Extra depreciation for taxes (5892000) Taxable income $888,000 The estimated litigation expense of $3890000 will be deductible in 2025 when it is expected to be paid. Use of the depreciable assets will result in taxable amounts of $1964000 in each of the next 3 years. The income tax rate is 20% for all years. The deferred tax asset at the end of 2024 to be recognized is
Assume that TDW Corporation ( calendar year-end) has 2022 taxable income of 654,000 for purposes of computing the expense. The company acquired the following assets during 2022MACRS and Computer equipownt In September 12 February 10 2 2,270,400 263,650 3,415,000 a What is the maximum amount of 179 expense may deduct for 20227
Subject : Accounting Bre-X Inc.'s only temporary difference at the beginning and end of 2022 is caused by a $1.5-million deferred gain for tax purposes on an installment sale of a plant asset. The related receivable (only one half of which is classified as a current asset) is due in equal instalments in 2023 and 2024. The related deferred tax liability at the beginning of the year is $300,000. In Quarter three (3) of 2022, a new tax rate of 24% is enacted into law and is scheduled to become effective for 2024. Taxable income is expected in all future years. Required: a. Determine the amount to be reported as a deferred tax liability at the end of 2022. Indicate its proper classification(s) if Bre-X Inc. uses ASPE guidelines. b. Indicate the classification of the Deferred Tax Asset or Deferred Tax Liability account if Bre-X Inc. uses IFRS guidelines. c. Prepare the journal entry (if any) that is necessary to adjust the deferred tax liability when the new tax rate is enacted into law.
For the year ended December 31, 2021, White Company reported pretax financial income of P5,000,000, while It’s taxable income amounts to P4,928,000. For the year 2021, the company’s book depreciation was P 268,000, while for tax purposes, the depreciation taken was P340,000. This temporary difference will reverse over the years 2022 through 2024 as follows: 2022-P28,000; 2023-P 25,000; 2024- P19,000. The enacted tax rates are as follows: 2021: 30% 2022: 32% 2023: 34% 2024: 36% How much deferred tax asset/deferred tax liability was reported by White Company on December 31, 2021?