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 $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:
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 18E
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The following information is available for Marigold Corporation for 2020.
| 1. | ||
| 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 |
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:
Transcribed Image Text:Prepare the income tax expense section of the income statement for 2020, beginning with "Income before income taxes." (Enter
negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Marigold Corporation
Income Statement (Partial)
For the Year Ended December 31, 2020
Income before Income Taxes
833,000
Income Tax Expense
297,000
Current
Deferred
81,200
'Net Income / (Loss)
454,800
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