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Computing and Reporting Deferred Income Taxes Early in January 2016, Oler, Inc. purchased equipment costing 516,000....
Early in January 2019, Oler, Inc., purchased equipment costing $48,000. The equipment had a 2-year useful...
Early in January 2019, Oler, Inc., purchased equipment costing $48,000. The equipment had a 2-year useful life and was depreciated in the amount of $24,000 in 2019 and 2020. Oler deducted the entire $48,000 on its tax return in 2019. This difference was the only one between its tax return and its financial statements. Oler's income before depreciation expense and income taxes was $708,000 in 2019 and $735,000 in 2020. The tax rate in each year was 25%. Required a....
Deferred Tax Calculations (Appendix) Wyhowski Inc. reported income from operations, before taxes, for 2015-2017 as follows:...
Deferred Tax Calculations (Appendix) Wyhowski Inc. reported income from operations, before taxes, for 2015-2017 as follows: 2015 $433,000 2016 495,000 2017 580,000 When calculating income, Wyhowski deducted depreciation on plant equipment. The equipment was purchased January 1, 2015, at a cost of $180,000. The equipment is expected to last three years and have a(n) $15,000 salvage value. Wyhowski uses straight-line depreciation for book purposes. For tax purposes, depreciation on the equipment is $103,000 in 2015, $41,000 in 2016, and $21,000...
(Two Differences, No Beginning Deferred Taxes, Multiple Rates) Teri Hatcher Inc., in its first year of...
(Two Differences, No Beginning Deferred Taxes, Multiple Rates) Teri Hatcher Inc., in its first year of oper- ations, has the following differences between the book basis and tax basis of its assets and liabilities at the end of 2016. Book Basis Equipment (net) $400,000 Estimated warranty liability $200,000 Tax Basis $340,000 $ –0– It is estimated that the warranty liability will be settled in 2017. The difference in equipment (net) will result in taxable amounts of $20,000 in 2017, $30,000...
yhowski Inc. reported income from operations, before taxes, for 2015-2017 as follows: 2015 $173,000 2016 198,000...
yhowski Inc. reported income from operations, before taxes, for 2015-2017 as follows: 2015 $173,000 2016 198,000 2017 232,000 When calculating income, Wyhowski deducted depreciation on plant equipment. The equipment was purchased January 1, 2015, at a cost of $72,000. The equipment is expected to last three years and have a(n) $6,000 salvage value. Wyhowski uses straight-line depreciation for book purposes. For tax purposes, depreciation on the equipment is $41,000 in 2015, $17,000 in 2016, and $8,000 in 2017. Wyhowski's tax...
Chec Shannon Polymers uses straight-line depreciation for financial reporting purposes for equipment costing $660,000 and with...
Chec Shannon Polymers uses straight-line depreciation for financial reporting purposes for equipment costing $660,000 and with an expected useful life of four years and no residual value. Assume that, for tax purposes, the deduction is 40%, 30%, 20%, and 10% in those years. Pretax accounting income the first year the equipment was used was $760,000, which includes interest revenue of $18,000 from municipal governmental bonds. Other than the two described, there are no differences between accounting income and taxable income....
At the end of 2016, Pearl Company has $181,100 of cumulative temporary differences that will result...
At the end of 2016, Pearl Company has $181,100 of cumulative temporary differences that will result in reporting the following future taxable amounts. 2017 $59,800 2018 51,100 2019 39,000 2020 31,200 $181,100 Tax rates enacted as of the beginning of 2015 are: 2015 and 2016 40 % 2017 and 2018 30 % 2019 and later 25 % Pearl’s taxable income for 2016 is $316,200. Taxable income is expected in all future years. (a) Prepare the journal entry for Pearl to...
Exercise 19-11 At the end of 2016, Metlock Company has $182,500 of cumulative temporary differences that...
Exercise 19-11 At the end of 2016, Metlock Company has $182,500 of cumulative temporary differences that will result in reporting the following future taxable amounts. 2017 2018 2019 2020 $59,100 50,200 42,000 31,200 $182,500 Tax rates enacted as of the beginning of 2015 are: 2015 and 2016 2017 and 2018 2019 and later 40 % 30% 25 % Metlock's taxable income for 2016 is $314,700. Taxable income is expected in all future years. (a) Prepare the journal entry for Metlock...
The following information is available for Crane Corporation for 2016 (its first year of operations). 1....
The following information is available for Crane Corporation
for 2016 (its first year of operations).
1.
Excess of tax depreciation over book depreciation, $43,800.
This $43,800 difference will reverse equally over the years
2017–2020.
2.
Deferral, for book purposes, of $18,600 of rent received in
advance. The rent will be recognized in 2017.
3.
Pretax financial income, $272,800.
4.
Tax rate for all years, 40%.
Compute taxable income for 2016.
Taxable income
$
SHOW LIST OF ACCOUNTS
Prepare the journal...
Exercise 19-12 Pronghorn Corp. has a deferred tax asset account with a balance of $154,400 at...
Exercise 19-12 Pronghorn Corp. has a deferred tax asset account with a balance of $154,400 at the end of 2016 due to a single cumulative temporary difference of $386,000. At the end of 2017, this same temporary difference has increased to a cumulative amount of $440,000. Taxable income for 2017 is $819,000. The tax rate is 40% for all years. No valuation account related to the deferred tax asset is in existence at the end of 2016. (a) Record income...
Please check my answers. 1. Prepare Journal Entry to record income tax expense, deferred taxes, and...
Please check my answers.
1. Prepare Journal Entry to record income tax expense, deferred taxes, and income taxes payable for 2018 2. Draft the income tax expense section of the Income Statement, beginning with Income before income taxes". . Write an analysis directed toward the team at Good Company describing what the numbers mean and how they relate to the business. Information: Good Company began operations in 2018 and has provided the following information: 1. Pretax financial income for 2018...
Early in January 2019, Oler, Inc., purchased equipment costing $48,000. The equipment had a 2-year useful life and was depreciated in the amount of $24,000 in 2019 and 2020. Oler deducted the entire $48,000 on its tax return in 2019. This difference was the only one between its tax return and its financial statements. Oler's income before depreciation expense and income taxes was $708,000 in 2019 and $735,000 in 2020. The tax rate in each year was 25%. Required a....
Chec Shannon Polymers uses straight-line depreciation for financial reporting purposes for equipment costing $660,000 and with an expected useful life of four years and no residual value. Assume that, for tax purposes, the deduction is 40%, 30%, 20%, and 10% in those years. Pretax accounting income the first year the equipment was used was $760,000, which includes interest revenue of $18,000 from municipal governmental bonds. Other than the two described, there are no differences between accounting income and taxable income....
Exercise 19-11 At the end of 2016, Metlock Company has $182,500 of cumulative temporary differences that will result in reporting the following future taxable amounts. 2017 2018 2019 2020 $59,100 50,200 42,000 31,200 $182,500 Tax rates enacted as of the beginning of 2015 are: 2015 and 2016 2017 and 2018 2019 and later 40 % 30% 25 % Metlock's taxable income for 2016 is $314,700. Taxable income is expected in all future years. (a) Prepare the journal entry for Metlock...
The following information is available for Crane Corporation
for 2016 (its first year of operations).
1.
Excess of tax depreciation over book depreciation, $43,800.
This $43,800 difference will reverse equally over the years
2017–2020.
2.
Deferral, for book purposes, of $18,600 of rent received in
advance. The rent will be recognized in 2017.
3.
Pretax financial income, $272,800.
4.
Tax rate for all years, 40%.
Compute taxable income for 2016.
Taxable income
$
SHOW LIST OF ACCOUNTS
Prepare the journal...
Exercise 19-12 Pronghorn Corp. has a deferred tax asset account with a balance of $154,400 at the end of 2016 due to a single cumulative temporary difference of $386,000. At the end of 2017, this same temporary difference has increased to a cumulative amount of $440,000. Taxable income for 2017 is $819,000. The tax rate is 40% for all years. No valuation account related to the deferred tax asset is in existence at the end of 2016. (a) Record income...
Please check my answers.
1. Prepare Journal Entry to record income tax expense, deferred taxes, and income taxes payable for 2018 2. Draft the income tax expense section of the Income Statement, beginning with Income before income taxes". . Write an analysis directed toward the team at Good Company describing what the numbers mean and how they relate to the business. Information: Good Company began operations in 2018 and has provided the following information: 1. Pretax financial income for 2018...
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