14 QuestionWhat is the income tax payable for 2020? (Apply the pre-CREATE law rulings)M&M Company's income statement for the year ended December 31, 2020 (considered as the fifth yearof operations), shows pretax income of P3,000,000. The company's tax rate for 2020 is 30%. The followingitems are treated differently on the tax return and in the accounting records:Tax ReturnP140,000Accounting RecordsRent revenueP240,000Depreciation expensePremium on officers' life insurance and the familyis the beneficiaryThe records also show that the net sales are P60M; cost of goods sold is P29M; sales returns andallowances, P550,000; & sales discounts, P650,000. What is the income tax payable for 2020? (Appły thepre-CREATE law rulings)560,000440,000280,000

M&M Company's income statement for the year ended December 31, 2020 (considered as the fifth ye of operations), shows pretax income of P3,000,000. The company's tax rate for 2020 is 30%. The followi tems are treated differently on the tax return and in the accounting records: Tax Return P140,000 560,000 Accounting Records P240,000 Rent revenue Depreciation expense Premium on officers' life insurance and the family is the beneficiary The records also show that the net sales are P60M; cost of goods sold is P29M; sales returns a allowances, P550,000; & sales discounts, P650,000. What is the income tax payable for 2020? (Apply i areCREATE law rulinest 440,000 280,000

M&M Company's income statement for the year ended December 31, 2020 (considered as the fifth ye of operations), shows pretax income of P3,000,000. The company's tax rate for 2020 is 30%. The followi tems are treated differently on the tax return and in the accounting records: Tax Return P140,000 560,000 Accounting Records P240,000 Rent revenue Depreciation expense Premium on officers' life insurance and the family is the beneficiary The records also show that the net sales are P60M; cost of goods sold is P29M; sales returns a allowances, P550,000; & sales discounts, P650,000. What is the income tax payable for 2020? (Apply i areCREATE law rulinest 440,000 280,000

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 18E

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Rhodes Corporations financial statements are shown after part f. Suppose the federal-plus-state tax corporate tax is 25%. Answer the following questions. a. What is the net operating profit after taxes (NOPAT) for 2020? b. What are the amounts of net operating working capital for both years? c. What are the amounts of total net operating capital for both years? d. What is the free cash flow for 2020? e. What is the ROIC for 2020? f. How much of the FCF did Rhodes use for each of the following purposes: after-tax interest, net debt repayments, dividends, net stock repurchases, and net purchases of short-term investments? (Hint: Remember that a net use can be negative.) Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)
Incomc Taxes Then Company has been in operation for several years. It has both a deductible and a taxable temporary difference. At the beginning of 2019, its deferred tax asset was 690, and its deferred tax liability was 750. The company expects its lutine deductible amount to be deductible in 2020 and its Inline taxable amount to 1 taxable in 2021. In 2018, Congress enacted income tax rates for future years as follows: 2019, 30%; 2020, 34%; and 2021, 35%. At the end of 2019, Then reported income taxes payable of 25,800, an increase in its deferred tax liability of 300, and an ending balance in its deferred tax asset of 860. Thun has prepared the following schedule of items related to its income taxes for 2019. Required: Fill in the blanks in the preceding schedule. Show your calculations.
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)
Uncertain Tax Position At the end of the current year, Boyd Company claims a 200,000 tax credit on its income tax return. Boyd is uncertain whether the IRS will accept this credit. It studies the IRS regulations and determines that it is more likely than not that the IRS will accept all or some of this tax credit. Based on this research, Boyd estimates the following probability distribution of possible outcomes: Required: For the current year, determine (1) the amount that Boyd will recognize as a current tax benefit and (2) the amount that it will record as the unrecognized tax benefit.
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.
Interperiod Tax Allocation Klerk Company had four temporary differences between its pretax financial income and its taxable income during 2019 as follows: At the beginning of 2019, Klerk had a deferred tax liability of 84,300 related to Temporary Difference #2 and a deferred tax asset of 21,090 related to Temporary Difference #4. Based on its tax records, Klerk earned taxable income of 270,000 for 2019. Kerks accountant has prepared the following schedule showing the total future taxable and deductible amounts at the end of 2019 for its four temporary differences: The company has a history of earning income and expects to be profitable in the future. The income tax rate for 2019 is 40%, but in 2018 Congress enacted a 30% tax rate for 2020 and future years. During 2019, for financial accounting purposes, Klerk reported revenues of 750,000 and expenses of 447,100. The deferred taxes related to Temporary Differences #1, #2, and #4 are considered to be noncurrent by the company; the deferred tax related to Temporary Difference #3 is considered to be current. Required: 1. Prepare Klerks income tax journal entry for 2019. 2. Prepare a condensed 2019 income statement for Klerk. 3. Show how the income tax items are reported on Klerks December 31, 2019, balance sheet.
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. $________________
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