INTERMEDIATE ACCOUNTING(LL)-W/CONNECT
9th Edition
ISBN: 9781260216141
Author: SPICELAND
Publisher: MCG CUSTOM
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Chapter 16, Problem 16.14E
Multiple differences
• LO16–4, LO16–6
For the year ended December 31, 2018, Fidelity Engineering reported pretax accounting income of $977,000. Selected information for 2018 from Fidelity’s records follows:
| Interest income on municipal bonds | $32,000 |
| 55,000 | |
| Carrying amount of depreciable assets in excess of their tax basis at year-end | 85,000 |
| Warranty expense reported on the income statement | 26,000 |
| Actual warranty expenditures in 2018 | 16,000 |
Fidelity’s income tax rate is 40%. At January 1, 2018, Fidelity’s records indicated balances of zero and $12,000 in its
Required:
1. Determine the amounts necessary to record income taxes for 2018, and prepare the appropriate
2. What is Fidelity’s 2018 net income?
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Exercise 16-16 (Algo) Multiple differences; financial statement effects [LO16-2, 16-3, 16-5]
For the year ended December 31, 2024, Fidelity Engineering reported pretax accounting income of $984,000. Selected information for
2024 from Fidelity's records follows:
Interest income on municipal governmental bonds
$ 40,000
Depreciation claimed on the 2024 tax return in excess of depreciation on the income statement
Carrying amount of depreciable assets in excess of their tax basis at year-end
64,000
104,000
30,000
20,000
Warranty expense reported on the income statement
Actual warranty expenditures in 2024
Fidelity's income tax rate is 25%. At January 1, 2024, Fidelity's records indicated balances of zero and $10,000 in its deferred tax asset
and deferred tax liability accounts, respectively.
Required:
1. Determine the amounts necessary to record income taxes for 2024, and prepare the appropriate journal entry.
2. What is Fidelity's 2024 net income?
Complete this question by entering your…
Problem 19-01
The following information is available for Metlock Corporation for 2020.
1.
Depreciation reported on the tax return exceeded depreciation reported on the income statement by $122,000. This difference will reverse in equal amounts of $30,500 over the years 2021–2024.
2.
Interest received on municipal bonds was $11,000.
3.
Rent collected in advance on January 1, 2020, totaled $56,700 for a 3-year period. Of this amount, $37,800 was reported as unearned at December 31, 2020, for book purposes.
4.
The tax rates are 40% for 2020 and 35% for 2021 and subsequent years.
5.
Income taxes of $294,000 are due per the tax return for 2020.
6.
No deferred taxes existed at the beginning of 2020.
Compute taxable income for 2020.
Taxable income for 2020
$enter Taxable income for 2020 in dollars
Compute pretax financial income for 2020.…
Problem 15-58 (LO 15-6)
In each of the following independent cases for tax year 2022, determine the amount of business interest expense deduction and
disallowed interest expense carryforward, if any. Assume that average annual gross receipts exceed $27 million.
Required:
a. Company A has ATI of $70,000 and business interest expense of $20,000.
b. Company B has ATI of $90,000, business interest expense of $50,000, and business interest income of $2,000.
c. Company C has taxable income of $50,000 which includes business interest expense of $90,000 and depreciation of $20,000.
Note: For all requirements, leave no cells blank - be certain to enter "0" wherever required. Enter your answers in dollar values not
in million of dollars.
a. Company A
b. Company B
c. Company C
Interest expense
deduction
Disallowed interest
expense carryforward
Chapter 16 Solutions
INTERMEDIATE ACCOUNTING(LL)-W/CONNECT
Ch. 16 - Prob. 16.1QCh. 16 - A deferred tax liability (or asset) is described...Ch. 16 - Prob. 16.3QCh. 16 - Prob. 16.4QCh. 16 - Temporary differences result in future taxable or...Ch. 16 - Identify three examples of differences with no...Ch. 16 - The income tax rate for Hudson Refinery has been...Ch. 16 - Suppose a tax reform bill is enacted that causes...Ch. 16 - A net operating loss occurs when tax-deductible...Ch. 16 - Prob. 16.10Q
Ch. 16 - Additional disclosures are required pertaining to...Ch. 16 - Additional disclosures are required pertaining to...Ch. 16 - Prob. 16.13QCh. 16 - Prob. 16.14QCh. 16 - IFRS and U.S. GAAP follow similar approaches to...Ch. 16 - Temporary difference LO161 A company reports...Ch. 16 - Prob. 16.2BECh. 16 - Temporary difference LO162 A company reports...Ch. 16 - Prob. 16.4BECh. 16 - Temporary difference; income tax payable given ...Ch. 16 - Valuation allowance LO162, LO163 At the end of...Ch. 16 - Valuation allowance LO162, LO163 VeriFone Systems...Ch. 16 - Temporary and permanent differences; determine...Ch. 16 - Calculate taxable income LO161, LO164 Shannon...Ch. 16 - Multiple tax rates LO165 J-Matt, Inc., had pretax...Ch. 16 - Change in tax rate LO165 Superior Developers...Ch. 16 - Net operating loss carryforward LO167 During its...Ch. 16 - Net operating loss carryback LO167 AirParts...Ch. 16 - Tax uncertainty LO169 First Bank has some...Ch. 16 - Intraperiod tax allocation LO1610 Southeast...Ch. 16 - Temporary difference; taxable income given LO161...Ch. 16 - Prob. 16.2ECh. 16 - Prob. 16.3ECh. 16 - Prob. 16.4ECh. 16 - Prob. 16.5ECh. 16 - Prob. 16.6ECh. 16 - Identify future taxable amounts and future...Ch. 16 - Calculate income tax amounts under various...Ch. 16 - Determine taxable income LO161, LO162 Eight...Ch. 16 - Prob. 16.10ECh. 16 - Deferred tax asset; income tax payable given;...Ch. 16 - Prob. 16.12ECh. 16 - Prob. 16.13ECh. 16 - Multiple differences LO164, LO166 For the year...Ch. 16 - Multiple t ax rates LO162, LO165 Allmond...Ch. 16 - Prob. 16.16ECh. 16 - Deferred taxes; change in tax rates LO161, LO165...Ch. 16 - Multiple temporary differences; record income...Ch. 16 - Multiple temporary differences; record income...Ch. 16 - Net operating loss carryforward LO167 During...Ch. 16 - Net operating loss carryback LO167 Wynn Sheet...Ch. 16 - Net operating loss carryback and carryforward ...Ch. 16 - Identifying income tax deferrals LO161, LO162,...Ch. 16 - Multiple temporary differences; balance sheet...Ch. 16 - Multiple tax rates LO161, LO164, LO165 Case...Ch. 16 - Prob. 16.26ECh. 16 - Balance sheet classification LO168 As of December...Ch. 16 - Concepts; terminology LO161 through LO168 Listed...Ch. 16 - Tax credit; uncertainty regarding sustainability ...Ch. 16 - Intraperiod tax allocation LO1610 The following...Ch. 16 - FASB codification research LO165, LO168, LO1610...Ch. 16 - Prob. 16.1PCh. 16 - Prob. 16.2PCh. 16 - Prob. 16.3PCh. 16 - Prob. 16.4PCh. 16 - Change in tax rate; record taxes for four years ...Ch. 16 - Multiple differences; temporary difference yet to...Ch. 16 - Multiple differences; calculate taxable income;...Ch. 16 - Multiple differences; taxable income given; two...Ch. 16 - Determine deferred tax assets and liabilities ...Ch. 16 - Prob. 16.10PCh. 16 - Prob. 16.11PCh. 16 - Prob. 16.12PCh. 16 - Prob. 16.13PCh. 16 - Prob. 16.1BYPCh. 16 - Prob. 16.2BYPCh. 16 - Integrating Case 163 Tax effects of accounting...Ch. 16 - Communication Case 164 Deferred taxes; changing...Ch. 16 - Prob. 16.5BYPCh. 16 - Research Case 166 Researching the way tax...Ch. 16 - Analysis Case 167 Reporting deferred taxes; Ford...Ch. 16 - Prob. 16.8BYPCh. 16 - Judgment Case 169 Analyzing the effect of deferred...Ch. 16 - Prob. 16.12BYPCh. 16 - Target Case LO16-1, LO16-2, LO16-4, LO16-8,...Ch. 16 - Prob. 1CCIFRS
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