The statement of financial position of Mackay Ltd as at 30 June 2021 showed the following assets and liabilities. Assets Cash Inventories Accounts Receivables Allowance for Doubtful Debts Plant Accumulated Depreciation- Plant Deferred Tax Asset Liabilities Accounts Payable Provision for Long Service Leave Provision for Annual Leave Rent Received in Advance Deferred Tax Liability Additional information 2021 8 000 17 000 50 000 (5 500) 50 000 (26 000) ? 29 000 6 000 4 000 2 500 ? 2020 8 500 15 500 48 000 (4 000) 50 000 (21 000) 4 050 26 000 4 500 3 000 2 000 3 150 • Accumulated depreciation of plant for tax purposes was $39 000 at 30 June 2021. • The tax rate is 30%. Required: Prepare the deferred tax worksheet and journal entries to adjust deferred tax accounts.

The statement of financial position of Mackay Ltd as at 30 June 2021 showed the following assets and liabilities. Assets Cash Inventories Accounts Receivables Allowance for Doubtful Debts Plant Accumulated Depreciation- Plant Deferred Tax Asset Liabilities Accounts Payable Provision for Long Service Leave Provision for Annual Leave Rent Received in Advance Deferred Tax Liability Additional information 2021 8 000 17 000 50 000 (5 500) 50 000 (26 000) ? 29 000 6 000 4 000 2 500 ? 2020 8 500 15 500 48 000 (4 000) 50 000 (21 000) 4 050 26 000 4 500 3 000 2 000 3 150 • Accumulated depreciation of plant for tax purposes was $39 000 at 30 June 2021. • The tax rate is 30%. Required: Prepare the deferred tax worksheet and journal entries to adjust deferred tax accounts.

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter3: Taxes On The Financial Statements

Section: Chapter Questions

Problem 11P

See similar textbooks

Similar questions

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.
Prior to and during 2019, Shadrach Company reported tax depreciation at an amount higher than the amount of financial depreciation, resulting in a book value of the depreciable assets of 24,500 for financial reporting purposes and of 20,000 for tax purposes at the end of 2019. In addition, Shadrach recognized a 3,500 estimated liability for legal expenses in the financial statements during 2019; it expects to pay this liability (and deduct it for tax purposes) in 2023. The current tax rate is 30%, no change in the tax rate has been enacted, and the company expects to be profitable in future years. What is the amount of the net deferred tax liability at the end of 2019? a. 300 b. 450 c. 1,050 d. 1,350
Ironwood Corporation has ordinary taxable income of $65,000 in 2019, and a short-term capital loss of $15,000. What is the corporation's tax liability for 2019? $7,500 $5,250 $10,500 $13,650 None of the above
Tayla Corporation generated $400,000 of taxable income in the 2019. What is Tayla's corporate tax liability? $71,400 $84,000 $115,600 $0 None of the above
Incomc Taxes Then Company has been in operation for several years. It has both a deductible and a taxable temporary difference. At the beginning of 2019, its deferred tax asset was 690, and its deferred tax liability was 750. The company expects its lutine deductible amount to be deductible in 2020 and its Inline taxable amount to 1 taxable in 2021. In 2018, Congress enacted income tax rates for future years as follows: 2019, 30%; 2020, 34%; and 2021, 35%. At the end of 2019, Then reported income taxes payable of 25,800, an increase in its deferred tax liability of 300, and an ending balance in its deferred tax asset of 860. Thun has prepared the following schedule of items related to its income taxes for 2019. Required: Fill in the blanks in the preceding schedule. Show your calculations.