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The pre-tax income statements for Moonstone Ltd. for two years (summarized) wer 20X8 20X9 Revenues 266,000 $ 330,000 Expenses 181,000 237,000 Pre-tax income $ 85,000 $ 93,000 For tax purposes, the following income tax differences existed: evenues on the 20X9 statement of profit and loss include $37,000 rent, which is tax nearned at the end of 20X8 for accounting purposes. xpenses on the 20X9 statement of profit and loss include political contributions of S

The pre-tax income statements for Moonstone Ltd. for two years (summarized) wer 20X8 20X9 Revenues 266,000 $ 330,000 Expenses 181,000 237,000 Pre-tax income $ 85,000 $ 93,000 For tax purposes, the following income tax differences existed: evenues on the 20X9 statement of profit and loss include $37,000 rent, which is tax nearned at the end of 20X8 for accounting purposes. xpenses on the 20X9 statement of profit and loss include political contributions of S

Excel Applications for Accounting Principles
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
ChapterMB: Model-building Problems
Section: Chapter Questions
Problem 12M
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I need last two requirement i.e 4 and 5 The pre-tax income statements for Moonstone Ltd. for two years (summarized) were as follows: 20X8 20X9 Revenues $ 266,000 $ 330,000 Expenses 181,000 237,000 Pre-tax income $ 85,000 $ 93,000 For tax purposes, the following income tax differences existed: a. Revenues on the 20X9 statement of profit and loss include $37,000 rent, which is taxable in 20X8 but was unearned at the end of 20X8 for accounting purposes. b. Expenses on the 20X9 statement of profit and loss include political contributions of $12,500, which are not deductible for income tax purposes. c. Expenses on the 20X8 statement of profit and loss include $20,900 of estimated warranty costs, which are not deductible for income tax purposes until 20X9. Required: 1. What was the accounting carrying value and tax basis for unearned revenue and the warranty liability at the end of 20X8 and 20X9? 2. Compute (a) income tax payable, (b) deferred income tax, and (c) income tax expense for each period. Assume a tax rate of 30%. (Amounts to be deducted should be indicated by a minus sign.) 3. Give the entry to record income taxes for each period. 4. Complete statements of profit and loss to include income taxes expense. 5. What amount of deferred income tax will be reported on the statement of financial position at each year-end?
Transcribed Image Text:I need last two requirement i.e 4 and 5 The pre-tax income statements for Moonstone Ltd. for two years (summarized) were as follows: 20X8 20X9 Revenues $ 266,000 $ 330,000 Expenses 181,000 237,000 Pre-tax income $ 85,000 $ 93,000 For tax purposes, the following income tax differences existed: a. Revenues on the 20X9 statement of profit and loss include $37,000 rent, which is taxable in 20X8 but was unearned at the end of 20X8 for accounting purposes. b. Expenses on the 20X9 statement of profit and loss include political contributions of $12,500, which are not deductible for income tax purposes. c. Expenses on the 20X8 statement of profit and loss include $20,900 of estimated warranty costs, which are not deductible for income tax purposes until 20X9. Required: 1. What was the accounting carrying value and tax basis for unearned revenue and the warranty liability at the end of 20X8 and 20X9? 2. Compute (a) income tax payable, (b) deferred income tax, and (c) income tax expense for each period. Assume a tax rate of 30%. (Amounts to be deducted should be indicated by a minus sign.) 3. Give the entry to record income taxes for each period. 4. Complete statements of profit and loss to include income taxes expense. 5. What amount of deferred income tax will be reported on the statement of financial position at each year-end?
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