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me taxes bj. Temporary revenue and expense timing differences between income before income taxes and taxable income for four years of Jaffe Corporation's operations are as follows: Income before taxes Taxable income b. C. 2014 $12,000,000 10,500,000 Assume that Jaffe Corporation's income tax rate for each year is 20% and that all tax payments are made when due. a. Assume that Deferred Tax Payable has a credit balance of $275,000 on December 31, 20Y3. Complete the following table: Year 2013 2014 2015 20Y6 2017 20Y5 20Y6 $14,100,000 $15,800,000 12,400,000 14,200,000 Tax Expense on Income Statement 2017 $20,500,000 18,700,000 Tax Paid on Tax Return Deferred Income Tax Payable Year's Addition (Deduction) December 31 Balance Debit (Credit) $(275,000) Totals Over the life of a corporation, will the total tax expense on the income statements equal the total tax paid on the tax returns? Explain. On December 31, 20Y3, Jaffe Corporation had a credit balance of $275,000 in Deferred Income Tax Payable. Using your answer to part (a), did this balance increase or decrease from January 1, 20Y4, to December 31, 20Y7? If so, why?

me taxes bj. Temporary revenue and expense timing differences between income before income taxes and taxable income for four years of Jaffe Corporation's operations are as follows: Income before taxes Taxable income b. C. 2014 $12,000,000 10,500,000 Assume that Jaffe Corporation's income tax rate for each year is 20% and that all tax payments are made when due. a. Assume that Deferred Tax Payable has a credit balance of $275,000 on December 31, 20Y3. Complete the following table: Year 2013 2014 2015 20Y6 2017 20Y5 20Y6 $14,100,000 $15,800,000 12,400,000 14,200,000 Tax Expense on Income Statement 2017 $20,500,000 18,700,000 Tax Paid on Tax Return Deferred Income Tax Payable Year's Addition (Deduction) December 31 Balance Debit (Credit) $(275,000) Totals Over the life of a corporation, will the total tax expense on the income statements equal the total tax paid on the tax returns? Explain. On December 31, 20Y3, Jaffe Corporation had a credit balance of $275,000 in Deferred Income Tax Payable. Using your answer to part (a), did this balance increase or decrease from January 1, 20Y4, to December 31, 20Y7? If so, why?

College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter21: Corporations: Taxes, Earnings, Distributions, And The Statement Of Retained Earnings
Section: Chapter Questions
Problem 1SEA: CORPORATE INCOME TAX Stanton Company estimates that its 20-1 income tax will be 80,000. Based on...
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Obj. 1,2 B3-11 Deferred income taxes Temporary revenue and expense timing differences between income before income taxes and taxable income for four years of Jaffe Corporation's operations are as follows: Income before taxes Taxable income b. C. 2014 $12,000,000 10,500,000 Assume that Jaffe Corporation's income tax rate for each year is 20% and that all tax payments are made when due. Year 20Y3 20Y4 a. Assume that Deferred Tax Payable has a credit balance of $275,000 on December 31, 20Y3. Complete the following table: 20Y5 20Y6 20Y7 20Y5 $14,100,000 12,400,000 Tax Expense on Income Statement 20Y6 $15,800,000 14,200,000 20Y7 $20,500,000 18,700,000 Tax Paid on Tax Return Deferred Income Tax Payable Year's Addition (Deduction) December 31 Balance Debit (Credit) $(275,000) Totals Over the life of a corporation, will the total tax expense on the income statements equal the total tax paid on the tax returns? Explain. On December 31, 20Y3, Jaffe Corporation had a credit balance of $275,000 in Deferred Income Tax Payable. Using your answer to part (a), did this balance increase or decrease from January 1, 20Y4, to December 31, 20Y7? If so, why?
Transcribed Image Text:Obj. 1,2 B3-11 Deferred income taxes Temporary revenue and expense timing differences between income before income taxes and taxable income for four years of Jaffe Corporation's operations are as follows: Income before taxes Taxable income b. C. 2014 $12,000,000 10,500,000 Assume that Jaffe Corporation's income tax rate for each year is 20% and that all tax payments are made when due. Year 20Y3 20Y4 a. Assume that Deferred Tax Payable has a credit balance of $275,000 on December 31, 20Y3. Complete the following table: 20Y5 20Y6 20Y7 20Y5 $14,100,000 12,400,000 Tax Expense on Income Statement 20Y6 $15,800,000 14,200,000 20Y7 $20,500,000 18,700,000 Tax Paid on Tax Return Deferred Income Tax Payable Year's Addition (Deduction) December 31 Balance Debit (Credit) $(275,000) Totals Over the life of a corporation, will the total tax expense on the income statements equal the total tax paid on the tax returns? Explain. On December 31, 20Y3, Jaffe Corporation had a credit balance of $275,000 in Deferred Income Tax Payable. Using your answer to part (a), did this balance increase or decrease from January 1, 20Y4, to December 31, 20Y7? If so, why?
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