The following information is available for Coronado Corporation for 2020. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $114,000. This difference will reverse in equal amounts of $28,500 over the years 2021-2024. 1. 2. Interest received on municipal bonds was $10,200. Rent collected in advance on January 1, 2020, totaled $61,800 for a 3-year period. Of this amount, $41,200 was reported as unearned at December 31, 2020, for book purposes. 3. 4. The tax rates are 40% for 2020 and 35% for 2021 and subsequent years. 5. Income taxes of $308,000 are due per the tax return for 2020. 6. No deferred taxes existed at the beginning of 2020.

The following information is available for Coronado Corporation for 2020. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $114,000. This difference will reverse in equal amounts of $28,500 over the years 2021-2024. 1. 2. Interest received on municipal bonds was $10,200. Rent collected in advance on January 1, 2020, totaled $61,800 for a 3-year period. Of this amount, $41,200 was reported as unearned at December 31, 2020, for book purposes. 3. 4. The tax rates are 40% for 2020 and 35% for 2021 and subsequent years. 5. Income taxes of $308,000 are due per the tax return for 2020. 6. No deferred taxes existed at the beginning of 2020.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter12: Liabilities: Off-balance-sheet Financing, Retirement Benefits, And Income Taxes

Section: Chapter Questions

Problem 26E

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Rhodes Corporations financial statements are shown after part f. Suppose the federal-plus-state tax corporate tax is 25%. Answer the following questions. a. What is the net operating profit after taxes (NOPAT) for 2020? b. What are the amounts of net operating working capital for both years? c. What are the amounts of total net operating capital for both years? d. What is the free cash flow for 2020? e. What is the ROIC for 2020? f. How much of the FCF did Rhodes use for each of the following purposes: after-tax interest, net debt repayments, dividends, net stock repurchases, and net purchases of short-term investments? (Hint: Remember that a net use can be negative.) Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)
Future Values and Long-Term Investments Portman Corporation engaged in the following transactions during 2020: a. On January 1, 2020, Portman deposited $12,000 in a certificate of deposit paying 6% interest compounded semiannually (3% per 6-month period). The certificate will mature on December 31, 2023 b. On January 1, 2020, Portman established an account with Lee County Bank. Portman will make quarterly payments of $2,500 to Lee beginning on March 31, 2020, and ending on December 31, 2021. Lee guarantees an interest rate of 8% compounded quarterly (2% per 3-month period). Required: 1. Prepare the cash flow diagram for each of these two investments. 2. Calculate the amount to which each of these investments will accumulate at maturity. (Note: Round answers to two decimal places.)
Intel-period Tax Allocation Chris Green, CPA, is auditing Rayne Co.s 2019 financial statements. For the year ended December 31, 2019, Rayne is applying GAAP for income taxes. Raynes controller, Dunn, has prepared a schedule of all differences between financial statement and income tax return income. Dunn believes that as a result of pending legislation, the enacted tax rate at December 31, 2019, will be increased for 2020. Dunn is uncertain which differences to include and which rates to apply in computing deferred taxes. Dunn has requested an overview of GAAP from Green. Required: Prepare a brief memo to Dunn from Green that identifies the objectives of accounting for income taxes, defines temporary differences, explains how to measure deferred tax assets and liabilities, and explains how to measure deferred income tax expense or benefit.
The following information is available for Marigold Corporation for 2020. 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $124,000. This difference will reverse in equal amounts of $31,000 over the years 2021–2024. 2. Interest received on municipal bonds was $9,300. 3. Rent collected in advance on January 1, 2020, totaled $64,200 for a 3-year period. Of this amount, $42,800 was reported as unearned at December 31, 2020, for book purposes. 4. The tax rates are 40% for 2020 and 35% for 2021 and subsequent years. 5. Income taxes of $297,000 are due per the tax return for 2020. 6. No deferred taxes existed at the beginning of 2020. Compute taxable income for 2020. Taxable income for 2020 Compute pretax financial income for 2020. Pretax financial income for 2020 Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2020 and 2021. Assume…
The following information is available for Marigold Corporation for 2020. 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $124,000. This difference will reverse in equal amounts of $31,000 over the years 2021–2024. 2. Interest received on municipal bonds was $9,300. 3. Rent collected in advance on January 1, 2020, totaled $64,200 for a 3-year period. Of this amount, $42,800 was reported as unearned at December 31, 2020, for book purposes. 4. The tax rates are 40% for 2020 and 35% for 2021 and subsequent years. 5. Income taxes of $297,000 are due per the tax return for 2020. 6. No deferred taxes existed at the beginning of 2020. Taxable income in 2020 = 742,500 Pretax financial income for 2020 = 833,000 Prepare the income tax expense section of the income statement for 2020, beginning with “Income before income taxes. picture below:
The following information is available for Marigold Corporation for 2020. 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $124,000. This difference will reverse in equal amounts of $31,000 over the years 2021–2024. 2. Interest received on municipal bonds was $10,100. 3. Rent collected in advance on January 1, 2020, totaled $56,700 for a 3-year period. Of this amount, $37,800 was reported as unearned at December 31, 2020, for book purposes. 4. The tax rates are 40% for 2020 and 35% for 2021 and subsequent years. 5. Income taxes of $308,000 are due per the tax return for 2020. 6. No deferred taxes existed at the beginning of 2020.
The following information is available for Remmers Corporation for 2020. 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $120,000. This difference will reverse in equal amounts of $30,000 over the years 2021–2024. 2. Interest received on municipal bonds was $10,000. 3. Rent collected in advance on January 1, 2020, totaled $60,000 for a 3-year period. Of this amount, $40,000 was reported as unearned at December 31, 2020, for book purposes. 4. The tax rates are 20% for 2020 and 17% for 2021 and subsequent years. 5. Income taxes of $160,000 are due per the tax return for 2020. 6. No deferred taxes existed at the beginning of 2020. Instructions a. Compute taxable income for 2020. b. Compute pretax financial income for 2020. c. Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2020 and 2021. Assume taxable income was $480,000 in 2021. d. Prepare the…
The following information is available for Splish Corporation for 2020. 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $116,000. This difference will reverse in equal amounts of $29,000 over the years 2021–2024. 2. Interest received on municipal bonds was $10,200. 3. Rent collected in advance on January 1, 2020, totaled $60,000 for a 3-year period. Of this amount, $40,000 was reported as unearned at December 31, 2020, for book purposes. 4. The tax rates are 40% for 2020 and 35% for 2021 and subsequent years. 5. Income taxes of $312,000 are due per the tax return for 2020. 6. No deferred taxes existed at the beginning of 2020. (a) Compute taxable income for 2020. Taxable income for 2020 $enter Taxable income for 2020 in dollars
Problem 19-01 The following information is available for Metlock Corporation for 2020. 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $122,000. This difference will reverse in equal amounts of $30,500 over the years 2021–2024. 2. Interest received on municipal bonds was $11,000. 3. Rent collected in advance on January 1, 2020, totaled $56,700 for a 3-year period. Of this amount, $37,800 was reported as unearned at December 31, 2020, for book purposes. 4. The tax rates are 40% for 2020 and 35% for 2021 and subsequent years. 5. Income taxes of $294,000 are due per the tax return for 2020. 6. No deferred taxes existed at the beginning of 2020. Compute taxable income for 2020. Taxable income for 2020 $enter Taxable income for 2020 in dollars Compute pretax financial income for 2020.…
UMPI’s end of year pretax financial income for 2018 was $720,000. Included in it was $40,000 in interest income on municipal bonds, warranty expense accrued for $15,000, a $25,000 fine for dumping hazardous waste, and depreciation of $40,000. Depreciation for tax purposes was $65,000. Their tax rate was 21%. Format the income tax expense section of the income statement, starting with “income before income taxes”.
Caramel Compnay's 2023 Income Statement shpwed pretax accounting income of $2,500,000. To compute the federal income tax liability, the following 2023 data are provided: Income from exempt municipal bonds- $100,000 Depreciation deducted for tax purposes in excess of depreciation deducted for financial statement purposes- 200,000 Income tax rate- 20% What amount of current federal income tax liability should be included in caramel Company's December 31. 2023 balance sheet?
Wittco Company reports pretax GAAP income in 2020, its first year of operations, of $180,000. Temporary differences in the GAAP basis and tax basis of assets arose in 2020 from the following two sources. Prepayment of 2021 rent in the amount of $43,200 in 2020. An installment sale totaling $64,800, with cash collections expected in two equal amounts in 2022 and 2023. The enacted tax rates are 25% in 2020, 30% in 2021, and 40% in 2022 and thereafter. The enacted tax rates are 25% in 2020, 30% in 2021, and 40% in 2022 and thereafter. Required a. Record the income tax journal entry on December 31, 2020. b. Record the income tax journal entry on December 31, 2020, assuming that a new tax law is passed in 2020 decreasing the tax rate to 20% for 2020 and all years thereafter