At December 31, 2020, Higley Corporation has one temporary difference which will reverse and cause taxable amounts in 2021. In 2020, a new tax act set taxes equal to 35% for 2020, 30% for 2021, and 20% for 2022 and years thereafter. Instructions Explain what circumstances would call for Higley to compute its deferred tax liability at the end of 2020 by multiplying the cumulative temporary difference by:
a. 45%.
b. 40%.
c. 20%.
The answer is c i.e 20%. We have taken the cumulative difference in tax liability.
If the sale value is 100000
2020 35% 35000
2021 30% (100000-35000)65000 19500
2022 20%(100000-35000-19500)45500 9100
Balance 15%(45500-9100)36400 5460
At December 31, 2020, Higley Corporation has one temporary difference which will reverse and cause taxable...
Pharoah Corporation has one temporary
difference at the end of 2020 that will reverse and cause taxable
amounts of $58,600 in 2021, $64,100 in 2022, and $69,000 in 2023.
Pharoah’s pretax financial income for 2020 is $289,500, and the tax
rate is 30% for all years. There are no deferred taxes at the
beginning of 2020.
Pharoah Corporation has one temporary difference at the end of 2020 that will reverse and cause taxable amounts of $58,600 in 2021. $64.100 in...
Crane Corporation has one temporary difference at the end of 2020 that will reverse and cause taxable amounts of $56,200 in 2021, $61,000 in 2022, and $66,500 in 2023. Crane’s pretax financial income for 2020 is $285,200, and the tax rate is 30% for all years. There are no deferred taxes at the beginning of 2020. Compute taxable income and income taxes payable for 2020. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes...
Novak Corporation has one temporary difference at the end of 2020 that will reverse and cause taxable amounts of $54,000 in 2021, $58,900 in 2022, and $64,300 in 2023. Novak's pretax financial income for 2020 is $272,300, and the tax rate is 30% for all years. There are no deferred taxes at the beginning of 2020. Compute taxable income and income taxes payable for 2020. Taxable income Income taxes payable $ e Textbook and Media List of Accounts Prepare the...
6:31 @ . Indigo Corporation has one temporary difference at the end of 2020 that will reverse and cause taxable amounts of $49.800 in 2021. $54.700 in 2022, and $59,300 in 2023. Indigo's pretax financial income for 2020 is $285,000, and the tax rate is 30% for all years There are no deferred taxes at the beginning of 2020 Compute taxable income and income taxes payable for 2020 Prepare the journal entry to record income tax expense, deferred income taxes,...
E19.1 (LO1,2) (One temporary difference, Future Taxable Amounts, One Rate, No Beginning Differed Taxes) South Carolina Corporation has one temporary difference at the end of 2020 that will reverse and cause taxable amounts of $55,000 in 2021, $60,000 in 2022, and $65,000 in 2023. South Carolina’s pretax financial income for 2020 is $300,000, and the tax rate is 30% for all years. There are no deferred taxes at the beginning of 2020. Instructions Prepare the journal entry to record income...
E19.3, (LO 1, 2) Excel (One Temporary Difference, Future Taxable Amounts, One Rate, beginning Deferred Taxes) Bandung Corporation began 2020 with a $46,000 balance in the Deferred Tax Liability account. At the end of 2020, the related cumulative temporary difference amounts to $350,000, and it will reverse evenly over the next 2 vears. Pretax accounting income for 2020 is $325,000. the tax rate for all years is 20%, and taxable income for 2020 is $405,000. Instructions a. Compute income taxes...
Flint Corporation has one temporary difference at the end of 2017 that will reverse and cause taxable amounts of $57,500 in 2018, $62,100 in 2019, and $66,600 in 2020. Flint’s pretax financial income for 2017 is $314,600, and the tax rate is 40% for all years. There are no deferred taxes at the beginning of 2017. (A) Compute Taxable Income and Income Taxes Payable for 2017. Taxable income $__________ Income Taxes Payable $________ (B) Prepare the journal entry to record...
Exercise 19-1 Headland Corporation has one temporary difference at the end of 2017 that will reverse and cause taxable amounts of $53,900 in 2018, $58,600 in 2019, and $63,900 in 2020. Headland's pretax financial income for 2017 is $304,500, and the tax rate is 40% for all years. There are no deferred taxes at the beginning of 2017 Compute taxable income and income taxes payable for 2017. Taxable income Income taxes payable $ Prepare the journal entry to record income...
I need help finishing the income statement please!
Exercise 19-01 Blossom Corporation has one temporary difference at the end of 2020 that will reverse and cause taxable amounts of $49,800 in 2021, $54,700 in 2022, and $59,300 in 2023. Blossom's pretax financial income for 2020 is $285,000, and the tax rate is 30% for all years. There are no deferred taxes at the beginning of 2020. Your answer is correct. Compute taxable income and income taxes payable for 2020. Taxable...
E19.3 (LOI,2) (One Temporary Difference, Future Taxable Amounts, One Rate, Beginning Deferred Taxes) Brennan Corporation began 2019 with a $90,000 balance in the Deferred Tax Liabil- ity account. At the end of 2019, the related cumulative temporary difference amounts to $350,000, and it will reverse evenly over the next 2 years. Pretax accounting income for 2019 is $525,000, the tax rate for all years is 40%, and taxable income for 2019 is $400,000. Instructions a. Compute income taxes payable for...