1.
Intra period tax allocation
Every business firm report their income from continuing operation and discontinued operation separately in financial statement for better understanding about the operation of business. So, for the tax purpose, a business should divide the total income tax expense for a reporting period between continuing and discontinued operations. A gain from discontinued operation increase the taxable income while loss from discontinued reduce the taxable income and produce a tax benefit.
To prepare: Recast the Income statement of R J Corporation to reflect intra-period tax allocation
2.
To Reconcile: Income tax expenses calculated in recast income statement with reported income tax expenses amount.
Want to see the full answer?
Check out a sample textbook solutionChapter 16 Solutions
INTERMEDIATE ACCOUNTING(LL)-W/CONNECT
- QUESTION 15 What is valid? ○ Tax rate ties together the information you have defined for a Zone Definition and a Tax Class to trigger the different rate of a sales tax. Tax rate ties together buyer's shipping address and payment to trigger the different rate of a sales tax. Tax class defines the percentage of a product's retail price or shipping charges that should be collected as different rate. ○ A Tax Class allows one group for all product so that every product can be taxed the same ratearrow_forwardCH 20 HW i 10 1 Saved Help Save & Exit Submit Check my work During 2022 (its first year of operations) and 2023, Fieri Foods used the FIFO inventory costing method for both financial reporting and tax purposes. At the beginning of 2024, Fieri decided to change to the average method for both financial reporting and tax purposes. points Income components before income tax for 2022, 2023, and 2024 were as follows: ($ in millions) Revenues 2022 $ 380 2023 2024 $ 390 $ 420 Cost of goods sold (FIFO) (38) (40) (46) eBook Cost of goods sold (average) (52) (56) (62) Operating expenses (242) (250) (254) Print References Dividends of $20 million were paid each year. Fieri's fiscal year ends December 31. Required: 1. Prepare the journal entry at the beginning of 2024 to record the change in accounting principle. (Ignore income taxes.) 2. Prepare the 2024-2023 comparative income statements. 3. & 4. Determine the balance in retained earnings at January 1, 2023, as Fieri reported using FIFO method…arrow_forwardProblem 16-6 (IAA) Complex Company reported the following information relating to income before tax for accounting purposes: 2021 2022 2023 2024 Income tax rate In 2021, the entity recognized doubtful accounts of P100,000. The doubtful accounts were considered worthless or uncollectible in 2022. 2,000,000 3,000,000 4,000,000 5,000,000 25% Analysis of the tax and book records disclosed P120,000 in unearned rent income on December 31, 2021 that had been recognized as taxable income in 2021 when the cash was received. Also on December 31, 2021, estimated warranty cost of P300,000 had been recognized as expense on the books in 2021 when the product sales were made but is not deductible for tax purposes until paid. The unearned rent income on December 31, 2021 was realized and the actual warranty payments were made in the following years: Rent income per book Actual warranty payments 40,000 40,000 40,000 2022' 2023 2024 20,000 80,000 200,000 Required: 1. Prepare journal entries for 2021,…arrow_forward
- 4G 46 10:13 O O 3 01:56:54 Remaining Multiple Choice A large domestic corporation has a net income of P5,140,000 in the Philippines and P3,950,000 from abroad. Compute the income tax due. P987,500 P1,285,000 P2,272,500 P2,489,800 46 of 60arrow_forwardEA# 9 Tax on Corporation: Problem Solving FnB Question 2 of 43 Fill in the blanks La Pagayo Corporation commenced business operations in calendar year 2001. It is subject to MCIT beginning 2005. Income taxes during the years from 2005 to 2012 are as follows: Normal Corporate Year Minimum Corporate Income Tax Excess of MCIT over NCIT Income Tax 2005 P25,000 P100,000 P75,000 2006 130,000 150,000 20,000 2007 200,000 190,000 0 2008 0 300,000 300,000 2009 10,000 50,000 40,000 2010 15,000 60,000 45,000 2011 8,000 40,000 32,000 2012 1,000 50,000 49,000 Income tax still due and payable for 2006 is NOTE: Answers are in numerical form. COMMA, PESO SIGN and other cha < Previous Cont Type here to search O E 28°C Heavy t-storm Shot on OnePlus Powered by Triple Camera hparrow_forwardO 1 75% AT&T LTE 11:52 AM Exit 1:08 Which of the following statements is FALSE? During the 1990s, most companies adopted compensation policies that more directly gave managers an ownership stake by including grants of stock or stock options to executives. Stock and option grants give managers an incentive to increase the stock price to make their stock or options as valuable as possible. By tying compensation to performance, shareholders aim to prevent/reduce agency problems. Increasing the pay-for-performance sensitivity comes with the added benefit of reducing manager's risk.arrow_forward
- 4G E 10:12 O O & 01:57:55 Remaining Multiple Choice FU Corporation is an exempt BMBE taxpayer in 2020 but became a taxable regular income taxpayer in 2021. It deducted P160,000 bad debt expense in 2020. In 2021, it recovered P30,000 out of the bad debts. Net income before bad debts in 2020 is P100,000 while net income before bad debts in 2021 amounted to 130,000. Compute for the net income in 2021. P100,000 P130,000 P160,000 P190,000 25 of 60arrow_forwardEXERCISE 5–11 Missing Data; Basic CVP Concepts [LO5–1, LO5–9] Fill in the missing amounts in each of the eight case situations below. Each case is independent of the others. (Hint: One way to find the missing amounts would be to prepare a contribution format income statement for each case, enter the known data, and then compute the missing items.) a. Assume that only one product is being sold in each of the four following case situations: {picture11} b. Assume that more than one product is being sold in each of the four following case situations: {picture12}arrow_forward5-7A • LO 3, 4 In April of the current year, Freeman Steel Company transferred Herb Porter from its factory in Nebraska to its plant in Michigan. The company's SUTA tax rates based on its experience ratings are 3.2% in Nebraska and 3.8% in Michigan. Both states base the tax on the first $9,000 of each employee's earnings. This year, Freeman Steel Company paid Herb Porter wages of $20,900; $2,800 were paid in Nebraska and the remainder in Michigan. Compute: See Example 5-1 on page 5-7 a. Amount of SUTA tax the company must pay to Nebraska on Porter's wages. b. Amount of SUTA tax the company must pay to Michigan on Porter's wages. c. Amount of the net FUTA tax on Porter's wages.... 2$ 2$arrow_forward
- 4G 10:12 O O 6 01:58:17 Remaining Multiple Choice B, Inc. owns a residential property it acquired for P3,000,000. It transferred ownership thereto to its supervisory employee for P2,400,000 when its fair value was P4,500,000. What is the monetary value of the benefit? P600,000 P1,500,000 P2,100,000 P2,400,000 16 of 60 IIarrow_forwardNote 21 Income Taxes The company's income (loss) before income tax provision (benefit) was subject to taxes in the following jurisdictions for the following periods: 20X2 20X1 Domestic $205,000 The provision (benefit) for income taxes is as follows: 20X2 Current tax provision (benefit): United States Deferred tax expense (benefit): United States LSM Student's initials Income tax provision (benefit) Significant components of the Company's deferred tax assets and liabilities as of December 31, 20X2 and 20X1 are as follows: December 31, 20X2 20X1 Deferred tax assets: Bad debt reserve (accounts receivable) 18,000 10,000 Org exp and start up costs Warranty reserve…arrow_forwardtrue or false tax rate is 21% ASC 740 does not require a company to monitor subsequent events (e.g., the issuance of new tax regulations, rulings, court opinions) that might change the company’s assessment that a tax position will be sustained on audit and litigation.arrow_forward
- Corporate Financial AccountingAccountingISBN:9781337398169Author:Carl Warren, Jeff JonesPublisher:Cengage LearningAccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
- Accounting (Text Only)AccountingISBN:9781285743615Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage LearningIndividual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENTIntermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning