At the end of Year 6, South Co.'s tax department estimates that they will have future...
At the end of Year 6, South Co.'s tax department estimates that they will have future taxable income of $288,000 due to installment sales and $90,000 due to depreciation differences. They also estimates that they will have future deducations of $300,000 during to unearned rent. Assuming that its pre-tax accounting income for the year ended December 31, Year 6 is $345,000, compute Year 6 taxable income for South Co.
Homework Answers
| Pre-tax accounting income | $345,000 |
| Less: Instalment Sales | 288000 |
| Depreciation | 90000 |
| Add: Unearned rent | 300000 |
| Taxable income for year 6 | $267,000 |
Add Answer to:
At the end of Year 6, South Co.'s tax department estimates that
they will have future...
Question 1 At the end of Year 6, South Co.'s tax department estimates that they will...
Question 1 At the end of Year 6, South Co.'s tax department estimates that they will have future taxable income of $288,000 due to installment sales and $90,000 due to depreciation differences. They also estimates that they will have future deducations of $300,000 due to unearned rent. Assuming that its pre-tax accounting income for the year ended December 31, Year 6 is $345,000, compute Year 6 taxable income for South Co.
3. Deferred tax assets and deferred tax liabilities arise from: a. Permanent differences between book and...
3. Deferred tax assets and deferred tax liabilities arise from: a. Permanent differences between book and tax income. b. Agreements between companies and the Internal Revenue Service to pay taxes currently owed on the installment basis. c. Future taxable and future deductible items, respectively. d. Future deductible and future taxable items, respectively. e. All of the above. 4. Kobo Roger Corp.'s taxable income differed from its accounting income computed for this past year. An item that would create a permanent...
During 2020, Indigo Co.’s first year of operations, the company reports pretax financial income at $274,700....
During 2020, Indigo Co.’s first year of operations, the company reports pretax financial income at $274,700. Indigo’s enacted tax rate is 45% for 2020 and 20% for all later years. Indigo expects to have taxable income in each of the next 5 years. The effects on future tax returns of temporary differences existing at December 31, 2020, are summarized as follows. Future Years 2021 2022 2023 2024 2025 Total Future taxable (deductible) amounts: Installment sales $29,400 $29,400 $29,400 $88,200 Depreciation...
year. mone lax expense for the year assumi or the year assuming that the tax rate...
year. mone lax expense for the year assumi or the year assuming that the tax rate is 40% this year and 50% starting next (3) Prepare the income tax expense section of the income statement, beginning with "Income before income taxes. (4) Indicate how deferred income taxes should be presented on the balance sheet. Problem 3. Walsh Services computed pretax financial income of $220,000 for 2017 and $288,000 for 2018. In preparing the income tax return for the year, the...
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...
At the end of 2020, its first year of operations, Wesley Co. prepared a reconciliation between...
At the end of 2020, its first year of operations, Wesley Co. prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income $ 520,000 Extra depreciation taken for tax purposes (1,200,000) Estimated expenses deductible for taxes when paid 890,000 Taxable income $ 210,000 Use of the depreciable assets will result in taxable amounts of $400,000 in each of the next three years. The estimated litigation expenses of $890,000 will be deductible in 2023 when settlement...
For the current tax year, Fannin Corporation, an Accrual Basis calendar year corporation, had the following...
For the current tax year, Fannin Corporation, an Accrual Basis calendar year corporation, had the following information: Net Income Per Books (after-tax) $189,650 Premium on life insurance policy on its key employees* 12,000 Excess capital losses 8,000 Excess tax depreciation 7,000 (MACRS depreciation in excess of Financial Accounting (Book) Depreciation) Life insurance proceed on life of its key employees 150,000 Rental income received in current tax year 90,000 ($40,000 is prepaid (Unearned Revenue) and relates to next tax year) Tax-Exempt...
Exercise 19-17 Kevin McDowell Co. establishes a $144,000,000 liability at the end of 2020 for the...
Exercise 19-17
Kevin McDowell Co. establishes a $144,000,000 liability at the
end of 2020 for the estimated site-cleanup costs at two of its
manufacturing facilities. All related closing costs will be paid
and deducted on the tax return in 2021. Also, at the end of 2020,
the company has $72,000,000 of temporary differences due to excess
depreciation for tax purposes, $10,080,000 of which will reverse in
2021.
The enacted tax rate for all years is 20%, and the company pays...
Hopkins Co. at the end of 2020, its first year of operations, prepared a reconciliation between...
Hopkins Co. at the end of 2020, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income $3,000,000 Estimated litigation expense 4,000,000 Extra depreciation for taxes (6,000,000) Taxable income $1,000,000 1). The estimated litigation expense of $4,000,000 will be deductible in 2021 when it is expected to be paid. Use of the depreciable assets will result in taxable amounts of $2,000,000 in each of the next three years. The income tax...
Assume Abbee Industries (AI) starts the current year, 2016, with a deferred tax asset balance of...
Assume Abbee Industries (AI) starts the current year, 2016, with a deferred tax asset balance of $2,000 and a deferred tax liability balance of $4,000. The current statutory tax rate, which is projected to be in effect when temporary differences reverse, is 30%. The reported pre-tax accounting income is $250,000. Analyze the following items to determine taxable income and income taxes payable, the change in deferred taxes payable (future taxable and deductible amounts), and tax expense for 2016. Assume there...
3. Deferred tax assets and deferred tax liabilities arise from: a. Permanent differences between book and tax income. b. Agreements between companies and the Internal Revenue Service to pay taxes currently owed on the installment basis. c. Future taxable and future deductible items, respectively. d. Future deductible and future taxable items, respectively. e. All of the above. 4. Kobo Roger Corp.'s taxable income differed from its accounting income computed for this past year. An item that would create a permanent...
year. mone lax expense for the year assumi or the year assuming that the tax rate is 40% this year and 50% starting next (3) Prepare the income tax expense section of the income statement, beginning with "Income before income taxes. (4) Indicate how deferred income taxes should be presented on the balance sheet. Problem 3. Walsh Services computed pretax financial income of $220,000 for 2017 and $288,000 for 2018. In preparing the income tax return for the year, the...
For the current tax year, Fannin Corporation, an Accrual Basis calendar year corporation, had the following information: Net Income Per Books (after-tax) $189,650 Premium on life insurance policy on its key employees* 12,000 Excess capital losses 8,000 Excess tax depreciation 7,000 (MACRS depreciation in excess of Financial Accounting (Book) Depreciation) Life insurance proceed on life of its key employees 150,000 Rental income received in current tax year 90,000 ($40,000 is prepaid (Unearned Revenue) and relates to next tax year) Tax-Exempt...
Exercise 19-17
Kevin McDowell Co. establishes a $144,000,000 liability at the
end of 2020 for the estimated site-cleanup costs at two of its
manufacturing facilities. All related closing costs will be paid
and deducted on the tax return in 2021. Also, at the end of 2020,
the company has $72,000,000 of temporary differences due to excess
depreciation for tax purposes, $10,080,000 of which will reverse in
2021.
The enacted tax rate for all years is 20%, and the company pays...
Most questions answered within 3 hours.
-
The rise of online shopping and Amazon, in particular, has
created major dilemmas for large food/CPG...
asked 2 minutes from now -
Is oxygen difluoride polar or nonpolar?
nonpolar
polar
ionic
none of the above
asked 8 minutes ago -
Starting from rest, a car accelerates at a constant rate of 2.6
m/s2 for a time...
asked 5 minutes ago -
A pharmaceutical company wants to answer the question whether
time for a drug in pill form...
asked 8 minutes ago -
) Assume that in the market for widgets, demand is highly
elastic compared to supply. If...
asked 18 minutes ago -
Why is a personal interview the most important step in the sales
selection process? What are...
asked 28 minutes ago -
In Python rOverlap (x1, y1, w1, h1, x2, y2, w2, h2) A rectangle
is axis-aligned if...
asked 28 minutes ago -
If we observe in a protein solution that DNA is causing a
mixture 260/280 ratio ~0.9,...
asked 39 minutes ago -
Explain the steps involved in making cDNA from mRNA, and how you
would create a cDNA...
asked 39 minutes ago -
A beta (β) particle is described by which of the following?
Select the correct answer below:...
asked 42 minutes ago -
A new machine costs $150,000, lasts 10 years, has an annual
O&M cost of $50,000, and...
asked 45 minutes ago -
A newspaper in a large Midwestern city reported that the
National Association of Realtors said that...
asked 47 minutes ago