How much is AMSTERDAM's net income for the year ended December 31, 2021? The following pre-tax amounts pertaining to AMSTERDAM Company for the year ended December 31, 2021:• Sales, P400,000• Selling and adminstrative expenses, P84,000• Other income, P40,000• Interest expense, P4,000• Cost of goods sold, P280,000• Oorrection of prior period error - credit, P16,000• Post-tax results of discontinued operations - credit, P40,000• Cumulative effect of change in accounting policy - debit, P24,000• Retained earnings, January 1, 2021 (not yet restated), P1,600,000• Dividends declared, P12,000• Income tax rate is 30%

Net profit means the difference between the income and expenses.Net profit after taxes means the…

The following pre-tax amounts pertaining to AMSTERDAM Company for the year ended December 31, 2021: • Sales, P400,000 • Selling and adminstrative expenses, P84,000 • Other income, P40,000 • Interest expense, P4,000 • Cost of goods sold, P280,000 • Correction of prior period error - credit, P16,000 • Post-tax results of discontinued operations - credit, P40,000 • Cumulative effect of change in accounting policy- debit, P24,000 • Retained earnings, January 1, 2021 (not yet restated), P1,600,000 • Dividends declared, P12,000 Income tax rate is 30%

The following pre-tax amounts pertaining to AMSTERDAM Company for the year ended December 31, 2021: • Sales, P400,000 • Selling and adminstrative expenses, P84,000 • Other income, P40,000 • Interest expense, P4,000 • Cost of goods sold, P280,000 • Correction of prior period error - credit, P16,000 • Post-tax results of discontinued operations - credit, P40,000 • Cumulative effect of change in accounting policy- debit, P24,000 • Retained earnings, January 1, 2021 (not yet restated), P1,600,000 • Dividends declared, P12,000 Income tax rate is 30%

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 9MC: Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and...

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Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and taxable income for 2020. The prior period adjustment was the result of an error in calculating bad debt expense for 2019. The current tax rate is 30%, and no change in the tax rate has been enacted for future years. When the company applies intraperiod income tax allocation, the prior period adjustment will be shown on the: a. income statement at 12,000 b. income statement at 8,400 (net of 3,600 income taxes) c. retained earnings statement at 12,000 d. retained earnings statement at 8,400 (net of 3,600 income taxes)
Heller Company began operations in 2019 and used the LIFO method to compute its 300,000 cost of goods sold for that year. At the beginning of 2020, Heller changed to the FIFO method. Heller determined that its cost of goods sold under FIFO would have been 250,000 in 2019. For 2020, Hellers cost of goods sold under FIFO was 360,000, while it would have been 410,000 under LIFO. Heller is subject to a 21% income tax rate. Compute the cumulative effect of the retrospective adjustment on prior years income (net of taxes) that Heller would report on its retained earnings statement for 2020.
Comprehensive Colt Company reports pretax financial income of 143,000 in 2019. In addition to pretax income from continuing operations (of which revenues are 295,000), the following items are included in this pretax income: Colts taxable income totals 93,000 in 2019. The difference between the pretax financial income and the taxable income is due to the excess of tax depreciation over financial depreciation on assets used in continuing operations. At the beginning of 2019, Colt had a retained earnings balance of 310.000 and a deferred tax liability of 8,100. During 2019, Colt declared and paid dividends of 48,000. It is subject to tax rates of 15% on the first 50,000 of income and 30% on income in excess of 50,000. Based on proper interperiod tax allocation procedures, Colt has determined that its 2019 ending deferred tax liability is 14,100. Required: 1. Prepare a schedule for Colt to allocate the total 2019 income tax expense to the various components of pretax income. 2. Prepare Colts income tax journal entry at the end of 2019. 3. Prepare Colts 2019 income statement. 4. Prepare Colts 2019 statement of retained earnings. 5. Show the related income tax disclosures on Colts December 31, 2019, balance sheet.
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