Grouper Company reports pretax financial income of $68,400 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 $17,000.2. Rent collected on the tax return is greater than rent recognized on the income statement by $21,000.3. Fines for pollution appear as an expense of $10,300 on the income statement.Grouper’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.(a) Compute taxable income and income taxes payable for 2020.Taxable income $enter a dollar amountIncome taxes payable $enter a dollar amount (b) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)Account Titles and ExplanationDebitCreditenter an account titleenter a debit amountenter a credit amountenter an account titleenter a debit amountenter a credit amountenter an account titleenter a debit amountenter a credit amountenter an account titleenter a debit amountenter a credit amount (c) Prepare the income tax expense section of the income statement for 2020, beginning with the line “Income before income taxes.” (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)Grouper CompanyIncome Statement (Partial)choose the accounting period select an income statement item $enter a dollar amountselect an opening section name select an income statement item $enter a dollar amount select an income statement item enter a dollar amount enter a subtotal of the two previous amountsselect a closing name for this statement $enter a total net income or loss amount (d) Compute the effective income tax rate for 2020. (Round answer to 1 decimal places, e.g. 25.5%.)Effective income tax rate enter the Effective income tax rate in percentages rounded to 1 decimal place %

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Answered: s pretax financial income of $68,400…

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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(a)

Compute taxable income and income taxes payable for 2020.

Taxable income		$enter a dollar amount
Income taxes payable		$enter a dollar amount

(b)

Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation	Debit	Credit
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount
enter an account title	enter a debit amount	enter a credit amount

(c)

Prepare the income tax expense section of the income statement for 2020, beginning with the line “Income before income taxes.” (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Grouper Company Income Statement (Partial) choose the accounting period


select an income statement item

select an opening section name
		$enter a dollar amount

select an income statement item

select an income statement item
	$enter a dollar amount

select a closing name for this statement
	enter a dollar amount
		enter a subtotal of the two previous amounts

		$enter a total net income or loss amount

(d)

Compute the effective income tax rate for 2020. (Round answer to 1 decimal places, e.g. 25.5%.)

Effective income tax rate

enter the Effective income tax rate in percentages rounded to 1 decimal place

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1.		Depreciation on the tax return is greater than depreciation on the income statement by $17,000.
2.		Rent collected on the tax return is greater than rent recognized on the income statement by $21,000.
3.		Fines for pollution appear as an expense of $10,300 on the income statement.