Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
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Chapter 13, Problem 13.6.3E
To determine
Introduction: Income tax is a mandatory tax which is paid by the individual of the country on its income of the financial year. It is to be paid to government and is calculated as per income tax laws. Every individual or business is bound to pay income tax on its income generated during the fiscal year. Also it has to file the return i.e. income tax returns yearly as per the laws.
Interim reporting: Interim reporting is made in between the fiscal year. It is made before the completion of fiscal year in mostly public corporation for taking various decisions for the remaining period. Mostly quarterly and half yearly report is prepared.
To choose: The correct answer.
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13. Pinnacle West operates in an industry for which NOL carryback is not allowed, and had the following pretax income (loss) over its first three years of operations
2019
$
1,200,000
2020
(900,000
)
2021
1,500,000
For each year there were no deferred income taxes and the tax rate was 25%. No valuation account was deemed necessary for the deferred tax asset as of December 31, 2020. What was Pinnacle West's income tax expense in 2021?
Multiple Choice
240,000.
160,000.
375,000
480,000.
12)
Ehrlich Corporation prepared the following reconciliation for its first year of operations:
Pretax financial income for 2021 $2,550,000
Excess depreciation expense (450,000)
Taxable income $2,100,000
The temporary difference will reverse evenly over the next two years at an enacted tax rate of 30%. The enacted tax rate for 2021 is 20%. Prepare the journal entry for the income taxes for 2021
11. Qorvo reported $1,000 million in income before income taxes for 2021, its first year of operations. Tax depreciation exceeded depreciation for financial reporting purposes by $160 million. The company also had non-tax-deductible expenses of $104 million relating to permanent differences. The income tax rate for 2021 was 25%, but the enacted rate for years after 2021 is 30%. The balance in the deferred tax liability in the December 31, 2021, balance sheet is:
Multiple Choice
$28 million.
$84 million.
$43 million.
$48 million.
Chapter 13 Solutions
Advanced Financial Accounting
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