Question

The following information is available for Ivanhoe Corporation for 2017. 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $114,000. This difference will reverse in equal amounts of $28,500 over the years 2018- 2021. 2. Interest received on municipal bonds was $10,100. 3. Rent collected in advance on January 1, 2017, totaled $57,000 for a 3-year period. Of this amount, $38,000 was reported as unearned at December 31, 2017, for book purposes. 4. The tax rates are 40% for 2017 and 35% for 2018 and subsequent years. 5. Income taxes of $338,000 are due per the tax return for 2017. 6. No deferred taxes existed at the beginning of 2017. Your answer is correct. Compute taxable income for 2017. Taxable income for 2017 845000 SHOW LIST OF ACCOUNTS SHOW SOLUTION LINK TO TEXT LINK TO TEXT LINK TO TEXT Your answer is correct. Compute pretax financial income for 2017. Pretax financial income for 2017 931100 SHOW LIST OF ACCOUNTS SHOW SOLUTION

Answer 1

Page: No Answer 0 Tele in came fier shelt Income far for 2014 ¿ $ 338000 Tax rate - 404 Taxable income $ 338000 $845000 401 F: Taxable income for 2014 * $845000 Puebas firencial income for 2014 Taxable income = $845000 Book fax difference of depreciation = $ 114000 Interest received on Monicipal bonds - $ 10100 Uncanned rent = $38000 Prebaa financial income for 2014 = 845000 + 114000 + 10100 - 38000 = $931100 Pretas financial crcome for 2014 = $ 93100

Page No Date Debit 1 Gredit $364600 I dec 31 | *13300 2017 © Townal entries - Particular income tax expense Deferred tax assets To income tax payable To deberred tax liability dec 31, Income tax expense Deberred fax liability To income tax payable To deferred tax assets $ 338000 $ 39900 $ 329525. - 2018 $9975 $332850 $ 6650 2013 Deferred tase arsets = 38000X 35% = $ 13300 To income tax payable : 845000 X40. = $ 338000 To deberred fax liability = 114000 X 35 %. =$39900 Income tax expense = 338000 + 39900 – 13300 = $ 364600

Page No ③ 2018 Deferred tax liabililin = $28500x35% = $.9975 To income tax payable = $951000 X 35 %, = $332850 To deferred tax assets - (557000 - 38000) x 35%. E 19000X0.35 = $ 6650 Income tax expense = 3328 50 + 6650 -9975 = $ 329525 Lancome to me expense scchion g Encome statement for 2017 : Particular Amount | Amount Income bebore faves $ 845000 Income tax expense Current tax $ 338000 Income tax expense - deberred far licbillig $.39900 Income tax benefit - deberred toix axels ($13300)| 6$ 364600) Net income 6480400