Liberty Corporation, an S corporation, had the following book-tax differences for the current year: Book Income 250,000 Adjustments: Inventory Adjustments (1) (15,000) Bad Debts 25,000 Parking Tickets 2,500 Depreciation (20,000) Meals/Entertainment 7,500 Installment Gains (15,000) Taxable Income 235,000 (1) Liberty uses the LIFO method for book purposes, but uses FIFO for tax purposes. What is Liberty’s current year AAA for the current year?

Q: If Papa and Bambina file separate income tax returns, what deferred income tax is created?

A: Answer:   $8,000

Q: Compute BBI’s tax expense for financial statement purposes.                 Compute BBI’s…

A: Tax expenses: Tax expenses can be defined as the liability owed by the corporations and the…

Q: Kara Fashions uses straight-line depreciation for financial statement reporting and MACRS for income…

A: Deferred Tax Asset Items on a company's balance sheet that may be used to reduce taxable income in…

Q: Gordon Company was started on January 1, 2010 and has two temporary differences between its income…

A: Journal entry refers to the first step in the accounting process, which signifies recording of…

Q: IT Company reported the following results for the year ended December 31, 2020, its first year of…

A:

Q: Kara Fashions uses straight-line depreciation for financial statement reporting and MACRS for income…

A: Deferred tax account shows the amount of reconciliation, which occurs due to the difference between…

Q: The reported pretax financial income of Luciano Company is P1,800,000 and current income tax rate is…

A: Financial Income 1800000

Q: For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income…

A: Deferred tax liability means liability calculated by finding difference between the comapany taxable…

Q: At the end of the year, the deferred tax asset account had a balance of $16 million attributable to…

A: Deferred Tax: Deferred tax is an amount i.e. computed on the basis of tax liability on the income as…

Q: Bee Corp. prepared the following reconciliation between book income and taxable income for the year…

A: Tax is a liability calculated on the income earned and paid to the government.

Q: Bee Corp. prepared the following reconciliation between book income and taxable income for the year…

A: Current portion of provision for income taxes  = Taxable income x income tax rate

Q: Hunter Company had a FUTA taxable payroll of $192,700 for the year. Since the company is located in…

A: FUTA TAX LIABILITY = TAXABLE PAYROLL  × FUTA RATE

Q: xable income is only $115,000. At the beginning of the year, no temporary differences existed.…

A: Explanation of Concept Deferred Tax Assets / Deferred tax Liability : are to be calculated when…

Q: Integrity Company computed a pre-tax financial income of P2,200,000 for its first year of operations…

A: According to the given question, we are required to compute the total income tax expense in 2021.…

Q: Palmer Co. had a deferred tax liability balance due to a temporary difference at the beginning of…

A: Deferred tax is the income tax payable in the future due to timing differences. It can be a…

Q: Lane Company (LC), a calendar year entity, has one owner, who is in the 31% Federal income tax…

A: Hello! Since you have posted a question with multiple sub-parts, we will solve the first three…

Q: The reported pretax financial income of Mechado Company is P1,800,000 and current income tax rate is…

A: Taxable income =  pretax financial income + Fines paid for late payment of taxes +  Impairment loss…

Q: Dauphin Corporation has taxable income of $600,000 in the current year. In the prior year, Dauphin…

A: Introduction Earning and profit (E&P) measures corporate ability to pay dividends to its…

Q: KreamyKeyk Company, in its first year of operations, has the following difference between the…

A: 1. Deferred tax liability to be reported in KreamyKeyk's statement of financial position at December…

Q: Anchor, inc, reports pretax financial income of $100,000 for 2020, S120,000 for 2021, and for 2022.…

A: Determination of taxable income    2020 2021 2022 Pretax Financial income $100,000 $120,000…

Q: Alvis Corporation reports pretax accounting income of $400,000, but due to a single temporary…

A:

Q: Dunkin, Inc. reported revenues of $150,000 and expenses of $70,000 in each of its first three years…

A: The effect of the difference between the income tax reported in the books as per GAPP and the income…

Q: Hurricane Ltd reports financial income of $100,000 for 2019. The following items cause taxable…

A: Income tax: Income tax refers to the direct tax levied on individual person or business and…

Q: The following facts relate to Krung Thep Corporation: 1. Deferred tax liability, January 1, 2015,…

A: a) The income tax payable is calculated below,

Q: At the end of the year, the deferred tax asset account had a balance of $4 million attributable to a…

A: Date Account Titles and Explanations Debit Credit December 31 Income tax expense $11…

Q: At the end of the year, the deferred tax asset account had a balance of $4 million attributable to a…

A: Journal is the book of original entry in which all the transactions of the business are recorded…

Q: In 2020, when the enacted tax rate for the current and all future periods was 20.5%, Garza Corp. had…

A:

Q: Lynch Company had a net deferred tax asset of $69,360 at the beginning of the year, representing a…

A: Net Unfavorable Temporary Difference = Unfavorable Temporary Difference - Favorable Temporary…

Q: EZ, Inc., reports pretax accounting income of $427,000, but due to a single temporary difference,…

A: Deferred Tax: Deferred tax is an amount i.e. computed on the basis of tax liability on the income as…

Q: Baybrook Company had net income of $22,500. The company had $4,000 in penalties, $5,600 in…

A: Taxable income refers to the net income which is earned by an entity in a given period of time and…

Q: Scott Corp. received cash of P20,000 that was included in revenues in its 20x4 financial statements…

A: Deferred income tax liability for 2014 = revenues taxable in 20x5 x enacted tax rate for 20x5

Q: Milo Manufacturing uses straight-line depreciation for financial statement reporting and is able to…

A:

Q: Alvis Corporation reports pretax accounting income of $300,000, but due to a single temporary…

A: Since taxable income is less than pre tax income, a future taxable amount will occur once the…

Q: Prance, Inc., earns pretax book net income of $800,000 in 2019. Prance acquires a depreciable asset…

A: Given that: Pretax book income = $800,000 U.S. tax rate = 21% After tax rate of return = 8%

Q: Callaway Corp. has a deferred tax asset account with a balance of $150,000 at the end of 2017 due to…

A: (a) Date Account Title and Explanation Debit Credit   Dec, 31 2013 Income tax…

Q: The reported pretax financial income of Mechado Company is P1,800,000 and current income tax rate is…

A: Taxable income =  pretax financial income + Fines paid for late payment of taxes +  Impairment loss…

Q: Milo Manufacturing uses straight-line depreciation for financial statement reporting and is able to…

A: Journal: Recording of a business transactions in a chronological order.

Q: the amortisation of goodwill arising from the acquisition of a business two years earlier. A…

A: While Computing the Taxable income, Following adjustments are to be done : a) $ 30000 are not to be…

Q: Lyons company deducts insurance expense of P84,000 for tax purposes in 2015, but the expense is not…

A:

Q: Red, Incorporated has book income of $500,000 before federal income tax expense which includes…

A: The deferred tax asset would arise on difference between book income qnd taxable income of $10000…

Q: Lynch's deferred income tax expense or benefit for the current year would be

A: A deferred tax asset or liability is a line item on a company's balance sheet that reduces or…

Q: Relix, Inc., is a domestic corporation. Relix, Inc., reported two permanent differences between book…

A: Given  that: Tax exempt municipal bond interest = $2375 Nondeductible business meal expenses = $780…

Q: Ross Company has been in business for several years, during which time it has been profitable. For…

A: Net Operating loss carryback: Carry back of net operating losses (NOLs) can help provide cash…

Q: indicate wheth-er a special adjustment must be made in computing R Corporation’s current E&P. Answer…

A: E & P is Earnings and Profit. It is the measure of the ability of the corporation to make…

Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.