Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Question
Chapter 18, Problem 1C
1.
To determine
State the two goals and four basic principles of accounting for income taxes.
2.
To determine
Elaborate the inter-period income tax allocation according to Generally Accepted Accounting Principles.
3.
To determine
State the four groups of items and the examples for each group that result in temporary differences.
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1. Which statement is true about intraperiod tax allocation?
a. It arises because certain revenue and expense items appear in the income statement either before or after they are included in the tax return
b. It is required for the cumulative effect of accounting changes but not for prick period adjustments
c. The purpose is to allocate income tax expense evenly over a number of accounting periods
d. The purpose is to relate the income tax expense to the items which affect the amount of tax
2. Which temporary difference would result in a deferred tax asset?
a. Tax penalty or surcharge
b. Dividend received on share investment
c. Excess tax depreciation over accounting depreciation
d. Rent received in advance included in taxable income but deferred for financial accounting
3. Which temporary difference would result in a deferred tax liability?
a. Interest revenue on municipal bonds
b. Accrual of warranty expense
c. Excess tax depreciation over…
(Identify Temporary or Permanent Differences) Listed below are items that are commonly accounted for differently for financial reporting purposes than they are for tax purposes.InstructionsFor each item below, indicate whether it involves:(1) A temporary difference that will result in future deductible amounts and, therefore, will usually give rise to a deferred income tax asset.(2) A temporary difference that will result in future taxable amounts and, therefore, will usually give rise to a deferred income tax liability.(3) A permanent difference.Use the appropriate number to indicate your answer for each.(a) ______ The MACRS depreciation system is used for tax purposes, and the straight-line depreciation method is used for financial reporting purposes for some plant assets.(b) ______ A landlord collects some rents in advance. Rents received are taxable in the period when they are received.(c) ______ Expenses are incurred in obtaining tax-exempt income.(d) ______ Costs of guarantees…
Interperiod and Intraperiod Tax Allocation
Income Tax allocation is an integral part of generally accepted accounting principles. Income tax allocation consists of both inraperiod and inter-period tax allocation.
Required
1. Explain the difference between interperiod income tax allocation
2. Explain how a corporation discloses its income tax expense (or Credit) for the year under intraperiod allocation
3.Provide an example of intraperiod tax allocation on a corporations income statement that includes income from continuing operations, a loss from the sale of a discontinued component and a gain from the operation f the discontinued. Assume a 30% tax rate.
Chapter 18 Solutions
Intermediate Accounting: Reporting And Analysis
Ch. 18 - What source is used to determine income tax...Ch. 18 - Prob. 2GICh. 18 - Prob. 3GICh. 18 - Prob. 4GICh. 18 - Prob. 5GICh. 18 - Prob. 6GICh. 18 - What are the three characteristics of a liability,...Ch. 18 - Prob. 8GICh. 18 - When does a corporation establish a valuation...Ch. 18 - List the steps necessary to measure and record a...
Ch. 18 - Prob. 11GICh. 18 - Prob. 12GICh. 18 - Prob. 13GICh. 18 - Prob. 14GICh. 18 - Prob. 15GICh. 18 - Describe an operating loss carryforward. List the...Ch. 18 - Prob. 17GICh. 18 - Prob. 18GICh. 18 - Prob. 19GICh. 18 - Prob. 20GICh. 18 - Prob. 21GICh. 18 - Prob. 22GICh. 18 - Prob. 23GICh. 18 - Which of the following is not a cause of a...Ch. 18 - Which of the following is an argument in favor of...Ch. 18 - Prob. 3MCCh. 18 - Prior to and during 2019, Shadrach Company...Ch. 18 - At the beginning of 2019, Conley Company purchased...Ch. 18 - Oliver Company earned taxable income of 7,500...Ch. 18 - Prob. 7MCCh. 18 - Prob. 8MCCh. 18 - Brooks Company reported a prior period adjustment...Ch. 18 - Which component of current income is not disclosed...Ch. 18 - Parker Company identifies depreciation as the only...Ch. 18 - Refer to RE18-1. Assume that Parkers taxable...Ch. 18 - In the current year, Madison Corporation had...Ch. 18 - Refer to RE18-3. Prepare the additional journal...Ch. 18 - Turnip Company purchased an asset at a cost of...Ch. 18 - Prob. 6RECh. 18 - Compute Radish Companys taxable income given the...Ch. 18 - Sky Company reports a pretax operating loss of...Ch. 18 - Prob. 9RECh. 18 - Kline Company has the following items of pretax...Ch. 18 - Barth James Inc. has the following deferred tax...Ch. 18 - Cole Company had a deferred tax liability of 1,000...Ch. 18 - Future Taxable Amount Arrow Company began...Ch. 18 - Change in Tax Rates At the end of 2019, Sentry...Ch. 18 - Temporary Difference At the end of 2019, its first...Ch. 18 - Single Temporary Difference: Multiple Rates At the...Ch. 18 - Prob. 5ECh. 18 - Valuation Account At the end of 2019, its first...Ch. 18 - Deferred Tax Asset and Valuation Account Zeta...Ch. 18 - Incomc Taxes Then Company has been in operation...Ch. 18 - Prob. 9ECh. 18 - Multiple Temporary Differences Vickers Company...Ch. 18 - Multiple Tax Rates For the year ended December 31,...Ch. 18 - Temporary and Permanent Differences Lin has just...Ch. 18 - Temporary and Permanent Differences Assume the...Ch. 18 - Operating Loss At the end of 2019, Keil Company...Ch. 18 - Operating Loss At the end of 2019, its first year...Ch. 18 - Operating Loss Baxter Company began operations in...Ch. 18 - Intraperiod Tax Allocation Wright Company reports...Ch. 18 - Prob. 18ECh. 18 - Prob. 19ECh. 18 - Balance Sheet Presentation Thiel Company reports...Ch. 18 - Uncertain Tax Position At the end of the current...Ch. 18 - Definitions The FASB has defined several terms in...Ch. 18 - Temporary and Permanent Differences In the current...Ch. 18 - Multiple Temporary Differences Wilcox Company has...Ch. 18 - Interperiod Tax Allocation Klerk Company had four...Ch. 18 - Prob. 5PCh. 18 - Interperiod Tax Allocation Quick Company reports...Ch. 18 - Deferred Tax Liability: Depreciation At the...Ch. 18 - Deferred Tax Liability: Depreciation Gire Company...Ch. 18 - Interperiod Tax Allocation Peterson Company has...Ch. 18 - Operating Loss Ross Company has been in business...Ch. 18 - Prob. 11PCh. 18 - Comprehensive Colt Company reports pretax...Ch. 18 - Prob. 13PCh. 18 - Comprehensive Jayryan Company sells products in a...Ch. 18 - Prob. 1CCh. 18 - Prob. 2CCh. 18 - Prob. 3CCh. 18 - Interperiod and Intraperiod Tax Allocation Income...Ch. 18 - Prob. 5CCh. 18 - Intel-period Tax Allocation Chris Green, CPA, is...Ch. 18 - Prob. 7CCh. 18 - Analyzing Coca-Colas Income Tax Disclosures Obtain...Ch. 18 - Prob. 9C
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