EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN: 9781337514835
Author: MOYER
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 2.A, Problem 4P
Summary Introduction
To determine: The expected annual tax liability.
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Almond Corporation, a calendar year C corporation, had taxable income of $400,000, $600,000 and $800,000 for 2016, 2017, and 2018, respectively. Almond’s taxable income is $900 million for 2019. Compute the minimum estimated tax payments that should have been made for 2019 for Almond Corporation, if Almond wants to avoid any penalty for underpayments of estimated taxes.(see the power points, the lecture, and google this too if needed)
In each of the following independent situations, determine the C corporation’s income tax liability. Assume that all corporations use a calendar year 2020. (see your PPs; your text; or go to IRS website)
Taxable
Violet Corporation
Income
$ 36,000
Indigo Corporation
380,000
Orange Corporation
810,000
Blue Corporation
RYPG
2,100,000
ABC Corporation provides you with the following information for the 2020 tax year, which was the company’s first year of operation:Book Income Before Taxes $100,000,000Book Depreciation $ 5,000,000MACRS Depreciation $ 7,500,000Foreign Sourced Income $ 40,000,000Assume a federal tax rate of 21%, disregard state taxes.a. Calculate federal taxable income.b. Calculate the federal tax payable and federal tax expense.c. Given your answer above in b., is a deferred tax asset or a deferred tax liability created? Provide the journal entry needed to reflect this.
The following information pertains to XYZ Inc.:
Year
Taxable Income (Loss)
Tax Rate
Taxes Paid
2019
$100,000
25%
$25,000
2020
$250,000
30%
$75,000
2021
$360,000
22%
$79,200
2022
$400,000
26%
$104,000
2023
$500,000
24%
$120,000
2024
$(600,000)
25%
-
Assuming that XYZ has a policy of tax refund maximization, how much would the company be able to recover in taxes through the use of its 2024 tax loss?
Multiple Choice
$141,600
$152,000
$133,000
$145,000
Verena Inc. earned income in 20x4 and suffered a loss for tax purposes in 20x5. Assume that even after carrying back and recovering taxes previously paid, there is still some loss remaining to carry forward. The journal entry related to the recognition of any benefit from carry-forward will be recognized as follows (assume the realization is probable)
Multiple Choice
Dr. income tax payable; cr. deferred tax asset.
Dr. income tax expense; Cr. deferred tax asset.
Dr. deferred tax asset;…
Chapter 2 Solutions
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Ch. 2.A - Prob. 1QTDCh. 2.A - Prob. 2QTDCh. 2.A - Prob. 3QTDCh. 2.A - Prob. 1PCh. 2.A - Prob. 2PCh. 2.A - Prob. 3PCh. 2.A - Prob. 4PCh. 2.A - Prob. 5PCh. 2.A - Prob. 6PCh. 2.A - Prob. 7P
Ch. 2.A - Prob. 8PCh. 2 - Prob. 1QTDCh. 2 - Prob. 2QTDCh. 2 - Prob. 3QTDCh. 2 - Prob. 4QTDCh. 2 - Prob. 5QTDCh. 2 - Prob. 6QTDCh. 2 - Prob. 7QTDCh. 2 - Prob. 8QTDCh. 2 - Prob. 9QTDCh. 2 - Prob. 10QTDCh. 2 - Prob. 1PCh. 2 - Prob. 2PCh. 2 - Prob. 3PCh. 2 - Prob. 4PCh. 2 - Prob. 5PCh. 2 - Prob. 6PCh. 2 - Prob. 7PCh. 2 - Prob. 8PCh. 2 - Prob. 9PCh. 2 - Prob. 10PCh. 2 - Prob. 11PCh. 2 - Prob. 12PCh. 2 - Prob. 13P
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