Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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Chapter 16, Problem 16.15E
Multiple t ax rates
• LO16–2, LO16–5
Allmond Corporation, organized on January 3, 2018, had pretax accounting income of $14 million and taxable income of $20 million for the year ended December 31, 2018. The 2018 tax rate is 35%. The only difference between accounting income and taxable income is estimated product warranty costs. Expected payments and scheduled tax rates (based on recent tax legislation) are as follows:
| 2019 | $2 million | 30% |
| 2020 | 1 million | 30% |
| 2021 | 1 million | 30% |
| 2022 | 2 million | 25% |
Required:
1. Determine the amounts necessary to record Allmond’s income taxes for 2018 and prepare the appropriate
2. What is Allmond’s 2018 net income?
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Intermediate Accounting ll ch 16
7. At the end of 2023, Payne Industries had a deferred tax asset account with a balance of $25 million attributable to a temporary book-tax difference of $100 million in a liability for estimated expenses. At the end of 2024, the temporary difference is $64 million. Payne has no other temporary differences and no valuation allowance for the deferred tax asset. Taxable income for 2024 is $180 million and the tax rate is 25%.
Required:
Prepare the journal entry(s) to record Payne’s income taxes for 2024, assuming it is more likely than not that the deferred tax asset will be realized in full.
Prepare the journal entry(s) to record Payne’s income taxes for 2024, assuming it is more likely than not that only one-fourth of the deferred tax asset ultimately will be realized.
Required 1
Record 2024 income taxes
Transaction
General Journal
Debit
Credit
1
Record…
Exercise 19.8 (Two Temporary Differences, One rate, 3 years).
Button Company has the following two temporary differences between its income tax expense and income taxes payable.
2020
2021
2022
Pretax Financial Income
$840,000
$910,000
$945,000
Excess Depreciation Expense on tax Return
(30,000)
(40,000)
(10,000)
Excess Warranty Expense in Financial Income
20,000
10,000
8,000
Taxable Income
$830,000
$880,000
$943,000
The income tax rate is 20% for all years.
Instructions:
a) Assuming there were no temporary differences prior to 2020, prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020,2021, and 2022.
b) Indicate how deferred taxes will be reported on the 2022 balance sheet. Button’s product warranty is for 12 months.
Deferred tax asset ( $ 0 + $ 0 + $ 0 )..............................$ 0
Deferred tax liability ( $ 0 + $ 0 + $ 0…
Hw.5.
Facts
Ryan recently disposed Bitcoin but initially did not report this. After an ATO investigation, the ATO issued an Amended Notice of Amendment which reported that he would be liable to pay tax liability totalling $100,000 and this was due 1 January 2021.
As Ryan did not have access to additional funds in the short term, Ryan was only able to pay the ATO debt 1 January 2022.
Question
Advise Ryan whether he can challenge the new liability imposed.
Assuming Ryan cannot challenge the new liability imposed, advise what administrative penalty and interest charges Ryan will be subject to and what information need to be provided to request a penalty and interest charge reversal.
Chapter 16 Solutions
Intermediate Accounting
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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