Answered: Sheridan Company made the following…

Sheridan Company made the following journal entry in late 2021 for rent on property it leases to Danford Corporation. Cash 143000 Unearned Rent Revenue 143000

PAYROLL ACCT.,2019 ED.(LL)-TEXT

19th Edition

ISBN:9781337619783

Author:BIEG

Publisher:BIEG

Chapter5: Unemployment Compensation Taxes

Section: Chapter Questions

Problem 11PA

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Concept explainers

Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.

Question

Sheridan Company made the following journal entry in late 2021 for rent on property it leases to Danford Corporation.

Cash	143000
Unearned Rent Revenue		143000

The payment represents rent for the years 2022 and 2023, the period covered by the lease. Sheridan Company is a cash basis taxpayer. Sheridan has income tax payable of $223000 at the end of 2021, and its tax rate is 25%.

Assuming the income taxes payable at the end of 2022 is $248000, what amount of income tax expense would Sheridan Company record for 2022?

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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