Compute for the deferred tax asset NINE Company reported a pre-tax financial income of P8,584,950 for the year ended December31, 2021. The following items were also noted:Insurance premium on life of an officer with NINE Companyas the beneficiaryTax depreciationFinancial depreciation175,000785,900572,150Penalties due to late filing of income tax returns80,650Dividend received348,250Estimated litigation loss accrued for financial accountingpurposes deductible when settled in the futureEstimated doubtful accounts expense275,875197,745Estimated tax paymentsIncome tax rateCash received for rent of which P486,280 will be recognizedas income by the company on the next year500,50035%589,125

In the given question, we are provided with the data of Nine Company. With the given information we…

NINE Company reported a pre-tax financial income of P8,584,950 for the year ended December 31, 2021. The following items were also noted: Insurance premium on life of an officer with NINE Company as the beneficiary Tax depreciation Financial depreciation Penalties due to late filing of income tax returns Dividend received Estimated litigation loss accrued for financial accounting purposes deductible when settled in the future 175,000 785,900 572,150 80,650 348,250 275,875 Estimated doubtful accounts expense Estimated tax payments 197,745 500,500 Income tax rate Cash received for rent of which P486,280 will be recognized as income by the company on the next year 35% 589,125

NINE Company reported a pre-tax financial income of P8,584,950 for the year ended December 31, 2021. The following items were also noted: Insurance premium on life of an officer with NINE Company as the beneficiary Tax depreciation Financial depreciation Penalties due to late filing of income tax returns Dividend received Estimated litigation loss accrued for financial accounting purposes deductible when settled in the future 175,000 785,900 572,150 80,650 348,250 275,875 Estimated doubtful accounts expense Estimated tax payments 197,745 500,500 Income tax rate Cash received for rent of which P486,280 will be recognized as income by the company on the next year 35% 589,125

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 12P: Comprehensive Colt Company reports pretax financial income of 143,000 in 2019. In addition to pretax...

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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.
In the current year, Madison Corporation had 50,000 of taxable income at a tax rate of 25%. During the year, Madison began offering warranties on its products and has a Warranty liability for financial reporting purposes of 5,000 at the end of the year. Warranty expenses are not deductible until paid for income tax purposes. Prepare the journal entry to record Madisons income taxes at the end of the year.
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