ncome taxes." (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Sheridan Corporation Income Statement (Partial) For the Year Ended December 31, 2021 come from Continuing Operations before Income Taxes 2$ 11 come Tax Expense rrent $
ncome taxes." (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Sheridan Corporation Income Statement (Partial) For the Year Ended December 31, 2021 come from Continuing Operations before Income Taxes 2$ 11 come Tax Expense rrent $
Chapter17: Corporations: Introduction And Operating Rules
Section: Chapter Questions
Problem 47P
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Question
Transcribed Image Text:Prepare the bottom portion of Sheridan's 2021 income statement, beginning with "Income from continuing operations before
income taxes." (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Sheridan Corporation
Income Statement (Partial)
For the Year Ended December 31, 2021
icome from Continuing Operations before Income Taxes
1164000
ncome Tax Expense
Current
$
Deferred
ncome from Continuing Operations
Gain on Discontinued Operations
195000
Less v
-39000
i
156000
let Income / (Loss)
$
%24
Transcribed Image Text:The following information has been obtained for Sheridan Corporation.
1.
Prior to 2020, taxable income and pretax financial income were identical.
2.
Pretax fınancial income is $1,634,000 in 2020 and $1,359,000 in 2021.
On January 1, 2020, equipment costing $1,260,000 is purchased. It is to be depreciated on a straight-line basis over 5 years
for tax purposes and over 8 years for financial reporting purposes. (Hint: Use the half-year convention for tax purposes, as
discussed in Appendix 11A.)
3.
Interest of $57,000 was earned on tax-exempt municipal obligations in 2021.
Included in 2021 pretax financial income is a gain on discontinued operations of $195,000, which is fully taxable.
6.
The tax rate is 20% for all periods.
7.
Taxable income is expected in all future years.
4.
5.
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