Riverbed Company reports pretax financial income of $65,000 for 2020. The following items cause taxable income to be different than pretax financial income. 1. Depreciation on the tax return is greater than depreciation on the income statement by $16,400. 2. Rent collected on the tax return is greater than rent recognized on the income statement by $23,100. 3. Fines for pollution appear as an expense of $11,200 on the income statement. Riverbed’s tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2020. Compute taxable income and income taxes payable for 2020. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020. Prepare the income tax expense section of the income statement for 2020, beginning with the line “Income before income taxes.” Compute the effective income tax rate for 2020.
Riverbed Company reports pretax financial income of $65,000 for 2020. The following items cause taxable income to be different than pretax financial income. 1. Depreciation on the tax return is greater than depreciation on the income statement by $16,400. 2. Rent collected on the tax return is greater than rent recognized on the income statement by $23,100. 3. Fines for pollution appear as an expense of $11,200 on the income statement. Riverbed’s tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2020. Compute taxable income and income taxes payable for 2020. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020. Prepare the income tax expense section of the income statement for 2020, beginning with the line “Income before income taxes.” Compute the effective income tax rate for 2020.
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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Riverbed Company reports pretax financial income of $65,000 for 2020. The following items cause taxable income to be different than pretax financial income.
| 1. | ||
| 2. | Rent collected on the tax return is greater than rent recognized on the income statement by $23,100. | |
| 3. | Fines for pollution appear as an expense of $11,200 on the income statement. |
Riverbed’s tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no
Compute taxable income and income taxes payable for 2020.
Prepare the
Prepare the income tax expense section of the income statement for 2020, beginning with the line “Income before income taxes.”
Compute the effective income tax rate for 2020.
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