Visayas Corporation has one temporary difference at the end of 2020 that will reverse and cause deductible amounts of P500,000 in 2021, P650,000 in 2022, and P400,000 in 2023. Visayas' pretax financial income for 2020 is P2,000,000, and the tax rate is 30% for all years. There are no deferred tax assets or liabilities at the beginning of 2020. Visayas expects profitable operations to continue in the future. REQUIRED: (b) Compute the taxable income and income tax expense- current for 2020. Compute also the deferred tax asset at December 31, 2020. Prepare journal entries to record income tax expense for 2020.

Visayas Corporation has one temporary difference at the end of 2020 that will reverse and cause deductible amounts of P500,000 in 2021, P650,000 in 2022, and P400,000 in 2023. Visayas' pretax financial income for 2020 is P2,000,000, and the tax rate is 30% for all years. There are no deferred tax assets or liabilities at the beginning of 2020. Visayas expects profitable operations to continue in the future. REQUIRED: (b) Compute the taxable income and income tax expense- current for 2020. Compute also the deferred tax asset at December 31, 2020. Prepare journal entries to record income tax expense for 2020.

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter14: Taxes On The Financial Statements

Section: Chapter Questions

Problem 20CE

See similar textbooks

Similar questions

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.
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
How do the all events and economic performance requirements apply to the following transactions by an accrual basis taxpayer? a. The company guarantees its products for six months. At the end of 2019, customers had made valid claims for 600,000 that were not paid until 2020. Also, the company estimates that another 400,000 in claims from 2019 sales will be filed and paid in 2020. b. The accrual basis taxpayer reported 200,000 in corporate taxable income for 2019. The state income tax rate was 6%. The corporation paid 7,000 in estimated state income taxes in 2019 and paid 2,000 on 2018 state income taxes when it filed its 2018 state income tax return in March 2019. The company filed its 2019 state income tax return in March 2020 and paid the remaining 5,000 of its 2019 state income tax liability. c. An employee was involved in an accident while making a sales call. The company paid the injured victim 15,000 in 2019 and agreed to pay the victim 15,000 a year for the next nine years.
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)