Question

B C D I L M N O P Q R G H COMPREHENSIVE PROBLEM Bulletin Book income before Tax 1,000,000 Calculate Taxable income Calculate

Please calculate tacabke income, taxes payable, and tax expense
0 0
Add a comment Improve this question Transcribed image text
Answer #1

Particulars Amount

Income under the head Business or Profession :

1. Income before Tax as per Books 1,000,000

2. Add: Losses relating to other Heads

Loss on sale of Equipment (175,000)

Loss on sale of XYZ Corp Stock (25,000)

Total (200,000) (200,000)

3. Net Income related to BGPB 800,000

4. Add: Expenses accounted for in the books of accounts

but not deductible as per Income Tax Act

Lobbying Expenses 50,000

Expenses for Fines 75,000

Expense related to contingent Liability Adj 75,000

Bad debts transfer to reserve 75,000

Book Depreciation 200,000

Total 575,000 375,000

5. Less: Income included in the books but not

taxable as per IT Act

Proceeds from Life Insurance Corp.

(exempt under Sec.10(10D) (100,000)

6. Less: Tax Depreciation (250,000)

7. Net Income from PGBP   825,000

8. income Under the head Capital gains:

Loss on Sale of XYZ Corp Stock (25,000)

Tax gain on sale of Equipment 25,000

Total 0 0

9. Total taxable Income 825,000

10. Taxes Payable @ 40%+Cess@4% 343,000

Gross Tax Payable (825,000*40%) 330,000

Add: cess @ 4% (330,000*4%) 13,200

Net Tax Liability 343,000

11. Tax Expense 332,800

Current tax 343,000

Deferred Tax (10,200)

Working notes:

1.Calculation of deferred Tax expense

Adjustable Taxable income as per Books

Net taxable Income as per IT Act 825,000

Add: Depreciation diff(250,000-200,000) 50,000

Less: Bad DebtsTransferred to reserve 75,000

Total Adjustable Income 800,000

Tax Liability as per Books 332,800

(800,000@40%+cess@4%)

Deferred tax Asset

Tax liability as per IT Act 343,000

tax Liability as per Books 332,800

Deferred Tax Asset 10,200

Add a comment
Know the answer?
Add Answer to:
Please calculate tacabke income, taxes payable, and tax expense B C D I L M N...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • All differences between the amount of income tax payable and the amount of income tax expense...

    All differences between the amount of income tax payable and the amount of income tax expense can be classified as either permanent differences or temporary differences. A num- ber of items that may give rise to differences are as follows: A. Season tickets are sold in advance by the Jacksonville Jaguars football team. B. Available-for-sale securities decreased in value during the year. C. A company accrues interest on a note receivable in the period before the borrower pays. D. Subsequent...

  • 1. Identify which section of the M-1 and the amount 2. Complete the M-1 Information Item...

    1. Identify which section of the M-1 and the amount 2. Complete the M-1 Information Item Used Income-sub. To tax not In Books. Exp. - In books not deductible Income-On Books not Return Exp. - In return not on books Taxable income (1120 Line 28) - $1,159,000 Net Income per Books - $875,000 Federal Income Tax - $384,500 Excess Capital Losses over gains - $5,000 Installment Sale Income - $8,500 Tax Exempt Interest - $3,500 Life Insurance Proceeds - $100,000...

  • Based on the book income to taxable income reconciliation you completed use the attached spreadsheet to...

    Based on the book income to taxable income reconciliation you completed use the attached spreadsheet to complete Palo Alto’s Schedule M-1. OTHER EXPENSES AND TOTAL EXPENSES FOR TAXABLE INCOME ARE -340,000 AND -15,845,000 Palo Alto, Inc. Schedule M-1 1 Net income per books 2 Federal income tax per books 3 Excess of capital losses over capital gains 4 Income subject to tax not recorded on books this year (itemize) 5 Expenses recorded on books this year not deducted on this...

  • Timpanogos Inc. is an accrual-method calendar-year corporation. For 2019, it reported financial statement income after taxes...

    Timpanogos Inc. is an accrual-method calendar-year corporation. For 2019, it reported financial statement income after taxes of $1,152,000. Timpanogos provided the following information relating to its 2019 activities: Life insurance proceeds as a result of CEO’s death $ 200,000 Revenue from sales (for both book and tax purposes) 2,000,000 Premiums paid on the key-person life insurance policies. The policies have no cash surrender value. 21,000 Charitable contributions 180,000 Cost of goods sold for book and tax purposes 300,000 Interest income...

  • Multiple Tax Rates For the year ended December 31, 2016, Nelson Co.’s income statement showed income...

    Multiple Tax Rates For the year ended December 31, 2016, Nelson Co.’s income statement showed income of $435,000 before income, tax expense. To compute taxable income, the following differences were noted: Income from tax-exempt municipal bonds $60,000 Depreciation deducted for tax purposes in excess of depreciation recorded on the books 120,000 Proceeds received from life insurance on death of an insured employee 100,000 Corporate tax rate for 2016 30% Enacted tax rate for future periods 35% Required: 1. Calculate taxable...

  • 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...

  • hello i am stuck on the line about bad debt C CORPORATION BOOK-TO-TAX RECONCILIATION. Western Corporation,...

    hello i am stuck on the line about bad debt C CORPORATION BOOK-TO-TAX RECONCILIATION. Western Corporation, an accrual basis, calendar-year C corporation, began operations on January 2, 2000. For each item below, determine the 2010 Schedule M-1 adjustment to reconcile book income to taxable income, i.e., the amount and the effect ( + or -). Net income per books $1,000,000 Provision for Federal income taxes, $320,000 Municipal bond interest, $20,000 During 2010, Western increased its allowance for uncollectible accounts by...

  • Jackson Corporation prepared the following book income statement for its year ended December 31, 2017: Computations for...

    Jackson Corporation prepared the following book income statement for its year ended December 31, 2017: Computations for Problem C:3-64 Sales $950,000 Minus: Cost of goods sold (450,000) Gross profit $500,000 Plus: Dividends received on Invest Corporation stock $3,000 Gain on sale of Invest Corporation stock 30,000 Total dividends and gain 33,000 Minus: Depreciation ($7,500+$52,000) $59,500 Bad debt expense 22,000 Other operating expenses 105,500 Loss on sale of Equipment 1 70,000 Total expenses and loss (257,000) Net income per books before...

  • C CORPORATION BOOK-TO-TAX RECONCILIATION. Astro Corporation, an accrual basis, calendar-year C corporation, began o...

    C CORPORATION BOOK-TO-TAX RECONCILIATION. Astro Corporation, an accrual basis, calendar-year C corporation, began operations on January 2, 2010. For each item below, determine the 2019 Schedule M-1 adjustment to reconcile book income to taxable income, i.e., the amount and the effect ( + or -). Net income per books $950,000 Provision for Federal income taxes, $240,000 Municipal bond interest, $12,000 During 2019, Astro increased its allowance for uncollectible accounts by $30,000; actual bad debts written off in 2019 were $36,000....

  • 1-22 Schedules M-1, M-2. P Corporation reports the following information for 2020: b. What are the...

    1-22 Schedules M-1, M-2. P Corporation reports the following information for 2020: b. What are the nature and Net income per books.. Federal income taxes (accrued) Net capital loss Travel and meals (50% portion disallowed for FIT) Proceeds of life insurance on president Insurance premiums on life of president Tax-exempt interest... ACRS deductions in excess of straight-line depreciation used for book purposes Excess charitable contributions... Unappropriated retained earnings (beginning of 2019) Dividends paid during the year Complete Schedules M-1 and...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT