Income Tax Expenses The expenses which are related to the taxable income of the individuals and business entities for an accounting period, and are recognized by them for the purpose of federal government and state government tax are called as income tax expenses. To explain: The difference between income tax expenses and income tax obligation.

Question

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Answer 1

Question

Chapter 16, Problem 16.1Q

To determine

Income Tax Expenses

The expenses which are related to the taxable income of the individuals and business entities for an accounting period, and are recognized by them for the purpose of federal government and state government tax are called as income tax expenses.

To explain: The difference between income tax expenses and income tax obligation.

Expert Solution & Answer

Answer to Problem 16.1Q

The income tax expenses contain both the current and deferred tax. $12.3 million expense includes $7.9 million as the amount which the company is liable to pay as income tax for the current year and $4.4 million ($12.3 million−$7.9 million) of income tax as deferred tax liability.

Explanation of Solution

Income tax expense combines both current and deferred tax.

Here, the company’s income statement reports income tax expense as $12.3 million and current year’s tax obligation as $7.9 million. So the difference amount of $4.4 million ($12.3 million−$7.9 million) is treated as deferred tax liability.

Conclusion

Hence, the difference amount of $4.4 million ($12.3 million−$7.9 million) can be explained as deferred tax liability.

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Students have asked these similar questions

Exco plc’s accountants have prepared the following IFRS income statement summary for the year ended 31 December 20X1: Amounts in £ Year 20X1 Total revenue 100,000 Total expenses 70,000 * Profit before tax 30,000 * includes a non-deductible expense (see below) The following information is also available: - Exco plc’s expenses include £10,000 for a penalty charge which is not tax-deductible. - The statutory tax rate on corporate profits is 20%. The current tax (expense) reported for the year ended 31 December 20X1 is: a. £3,000 b. £6,000 c. £8,000 d. £9,000 e. £13,000

XYZ is a calendar-year corporation that began business on January 1, 2021. For the year, it reported the following information in its current-year audited income statement. Notes with important tax information are provided below. XYZ corporation Income statement For current year Book Income Revenue from sales $ 40,000,000 Cost of Goods Sold (27,000,000) Gross profit $ 13,000,000 Other income: Income from investment in corporate stock 300,0001 Interest income 20,0002 Capital gains (losses) (4,000) Gain or loss from disposition of fixed assets 3,0003 Miscellaneous income 50,000 Gross Income $ 13,369,000 Expenses: Compensation (7,500,000)4 Stock option compensation (200,000)5 Advertising (1,350,000) Repairs and Maintenance (75,000) Rent (22,000) Bad Debt expense (41,000)6 Depreciation (1,400,000)7 Warranty expenses (70,000)8 Charitable donations (500,000)9 Meals (all at restaurants) (18,000) Goodwill impairment (30,000)10…

XYZ is a calendar-year corporation that began business on January 1, 2021. For the year, it reported the following information in its current-year audited income statement. Notes with important tax information are provided below. XYZ corp. BookIncome Income statement For current year Revenue from sales $ 40,000,000 Cost of Goods Sold (27,000,000 ) Gross profit $ 13,000,000 Other income: Income from investment in corporate stock 300,000 1 Interest income 20,000 2 Capital gains (losses) (4,000 ) Gain or loss from disposition of fixed assets 3,000 3 Miscellaneous income 50,000 Gross Income $ 13,369,000 Expenses: Compensation (7,500,000 )4 Stock option compensation (200,000 )5 Advertising (1,350,000 ) Repairs and Maintenance (75,000 ) Rent (22,000 ) Bad Debt expense (41,000 )6 Depreciation (1,400,000 )7 Warranty expenses (70,000 )8 Charitable donations (500,000 )9 Meals (18,000 )…

Answer 2

Question

Chapter 16, Problem 16.1Q

To determine

Income Tax Expenses

The expenses which are related to the taxable income of the individuals and business entities for an accounting period, and are recognized by them for the purpose of federal government and state government tax are called as income tax expenses.

To explain: The difference between income tax expenses and income tax obligation.

Expert Solution & Answer

Answer to Problem 16.1Q

The income tax expenses contain both the current and deferred tax. $12.3 million expense includes $7.9 million as the amount which the company is liable to pay as income tax for the current year and $4.4 million ($12.3 million−$7.9 million) of income tax as deferred tax liability.

Explanation of Solution

Income tax expense combines both current and deferred tax.

Here, the company’s income statement reports income tax expense as $12.3 million and current year’s tax obligation as $7.9 million. So the difference amount of $4.4 million ($12.3 million−$7.9 million) is treated as deferred tax liability.

Conclusion

Hence, the difference amount of $4.4 million ($12.3 million−$7.9 million) can be explained as deferred tax liability.

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Answer 3

Question

Chapter 16, Problem 16.1Q

To determine

Income Tax Expenses

The expenses which are related to the taxable income of the individuals and business entities for an accounting period, and are recognized by them for the purpose of federal government and state government tax are called as income tax expenses.

To explain: The difference between income tax expenses and income tax obligation.

Expert Solution & Answer

Answer to Problem 16.1Q

The income tax expenses contain both the current and deferred tax. $12.3 million expense includes $7.9 million as the amount which the company is liable to pay as income tax for the current year and $4.4 million ($12.3 million−$7.9 million) of income tax as deferred tax liability.

Explanation of Solution

Income tax expense combines both current and deferred tax.

Here, the company’s income statement reports income tax expense as $12.3 million and current year’s tax obligation as $7.9 million. So the difference amount of $4.4 million ($12.3 million−$7.9 million) is treated as deferred tax liability.

Conclusion

Hence, the difference amount of $4.4 million ($12.3 million−$7.9 million) can be explained as deferred tax liability.

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Answer 4

Question

Chapter 16, Problem 16.1Q

To determine

Income Tax Expenses

The expenses which are related to the taxable income of the individuals and business entities for an accounting period, and are recognized by them for the purpose of federal government and state government tax are called as income tax expenses.

To explain: The difference between income tax expenses and income tax obligation.

Expert Solution & Answer

Answer to Problem 16.1Q

The income tax expenses contain both the current and deferred tax. $12.3 million expense includes $7.9 million as the amount which the company is liable to pay as income tax for the current year and $4.4 million ($12.3 million−$7.9 million) of income tax as deferred tax liability.

Explanation of Solution

Income tax expense combines both current and deferred tax.

Here, the company’s income statement reports income tax expense as $12.3 million and current year’s tax obligation as $7.9 million. So the difference amount of $4.4 million ($12.3 million−$7.9 million) is treated as deferred tax liability.

Conclusion

Hence, the difference amount of $4.4 million ($12.3 million−$7.9 million) can be explained as deferred tax liability.

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Answer 5

Chapter 16, Problem 16.1Q

To determine

Income Tax Expenses

The expenses which are related to the taxable income of the individuals and business entities for an accounting period, and are recognized by them for the purpose of federal government and state government tax are called as income tax expenses.

To explain: The difference between income tax expenses and income tax obligation.

Expert Solution & Answer

Answer to Problem 16.1Q

The income tax expenses contain both the current and deferred tax. $12.3 million expense includes $7.9 million as the amount which the company is liable to pay as income tax for the current year and $4.4 million ($12.3 million−$7.9 million) of income tax as deferred tax liability.

Explanation of Solution

Income tax expense combines both current and deferred tax.

Here, the company’s income statement reports income tax expense as $12.3 million and current year’s tax obligation as $7.9 million. So the difference amount of $4.4 million ($12.3 million−$7.9 million) is treated as deferred tax liability.

Conclusion

Hence, the difference amount of $4.4 million ($12.3 million−$7.9 million) can be explained as deferred tax liability.

Answer 6

Chapter 16, Problem 16.1Q

To determine

Income Tax Expenses

The expenses which are related to the taxable income of the individuals and business entities for an accounting period, and are recognized by them for the purpose of federal government and state government tax are called as income tax expenses.

To explain: The difference between income tax expenses and income tax obligation.

Expert Solution & Answer

Answer to Problem 16.1Q

The income tax expenses contain both the current and deferred tax. $12.3 million expense includes $7.9 million as the amount which the company is liable to pay as income tax for the current year and $4.4 million ($12.3 million−$7.9 million) of income tax as deferred tax liability.

Explanation of Solution

Income tax expense combines both current and deferred tax.

Here, the company’s income statement reports income tax expense as $12.3 million and current year’s tax obligation as $7.9 million. So the difference amount of $4.4 million ($12.3 million−$7.9 million) is treated as deferred tax liability.

Conclusion

Hence, the difference amount of $4.4 million ($12.3 million−$7.9 million) can be explained as deferred tax liability.

Answer 7

Chapter 16, Problem 16.1Q

To determine

Income Tax Expenses

The expenses which are related to the taxable income of the individuals and business entities for an accounting period, and are recognized by them for the purpose of federal government and state government tax are called as income tax expenses.

To explain: The difference between income tax expenses and income tax obligation.

Answer 8

Expert Solution & Answer

Answer to Problem 16.1Q

The income tax expenses contain both the current and deferred tax. $12.3 million expense includes $7.9 million as the amount which the company is liable to pay as income tax for the current year and $4.4 million ($12.3 million−$7.9 million) of income tax as deferred tax liability.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Income tax expense combines both current and deferred tax.

Here, the company’s income statement reports income tax expense as $12.3 million and current year’s tax obligation as $7.9 million. So the difference amount of $4.4 million ($12.3 million−$7.9 million) is treated as deferred tax liability.

Answer 12

Conclusion

Hence, the difference amount of $4.4 million ($12.3 million−$7.9 million) can be explained as deferred tax liability.

Answer 13

Ch. 16 - Prob. 16.1Q Ch. 16 - A deferred tax liability (or asset) is described...Ch. 16 - Prob. 16.3Q Ch. 16 - Prob. 16.4Q Ch. 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

Answer to Problem 16.1Q

Explanation of Solution

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