Homework Answers
Answer 1 . e . Accrued revenues.
Explanation: Accrued revenues are taxable income & it can only be recognized for tax purpose only after it gets recognized in financial income . As information about accrued revenues can be extracted from financial statement only.
Answer 2. b. Recognize all deferred tax liabilities, but not all deferred tax assets.
Explanation: When an entity 's future net incomes are more likely than not ,it shows entity's inability to generate taxable income in future thus not all deferred tax assets will be recognize.
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Which of the following are temporary differences that are normally classified as revenues recognized for tax...
Indicate whether the items are permanent differences or temporary differences. For temporary differences, indicate whether they...
Indicate whether the items are permanent differences or temporary differences. For temporary differences, indicate whether they will create deferred tax assets or deferred tax liabilities. 1.Interest is received on an investment in tax-exempt governmental obligations. 2. For some assets, straight-line depreciation is used for both financial reporting purposes and tax purposes, but the assets’ lives are shorter for tax purposes. 3. The tax return reports a deduction for 80% of the dividends received from various corporations. The cost method is...
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...
Indicate whether the items are permanent differences or temporary differences. For temporary differences, indicate whether they...
Indicate whether the items are permanent differences or temporary differences. For temporary differences, indicate whether they will create deferred tax assets or deferred tax liabilities. 1. An accelerated depreciation system is used for tax purposes, and the straight-line depreciation method is used for financial reporting purposes for some plant assets. 2. A landlord collects some rents in advance. Rents received are taxable in the period when they are received. References 3. Expenses are incurred in obtaining tax-exempt income. 4. Costs...
15. Which of the following statements is correct? a. All current deferred tax liabilities and assets...
15. Which of the following statements is correct? a. All current deferred tax liabilities and assets shall be offset and presented as a single amount on the balance sheet. b. Deferred tax assets related to carryforwards shall be classified as current or noncurrent on the balance sheet based on their expected date of reversal. c. All current and noncurrent deferred taxes shall be offset and presented as a single amount on the balance sheet. d. Deferred tax liabilities and assets...
Book/Tax Differences Temporary Permanent Difference Reason Book 4,800 1,000 20 5,820 Sales Installment sales Interest Income...
Book/Tax Differences Temporary Permanent Difference Reason Book 4,800 1,000 20 5,820 Sales Installment sales Interest Income Required: Determine which book/tax differences are temp or perm Calculate and enter Federal income tax expense Prepare journal entry to record tax expense Calculate Effective Tax Rate Prepare Deferred Tax Reconcilation for Financial stmt footnote Tax 4,800 300 5 5 5,105 (700) (15) (700) Payments not received municipal bond interest 2,350 2,350 Assumptions: DTA and DTL beginning balances = 0 All DTAs and DTLs...
Permanent differences (between revenues and expenses for accounting and tax purposes): can cause Deferred Tax Liabilities...
Permanent differences (between revenues and expenses for accounting and tax purposes): can cause Deferred Tax Liabilities but not Deferred Tax Liabilities to arise can cause neither Deferred Tax Assets nor Deferred Tax Liabilities to arise can cause both Deferred Tax Assets and Deferred Tax Liabilities to arise can cause Deferred Tax Assets but not Deferred Tax Liabilities to arise
General Question/Exercise 16-7 Identify Permanent versus Temporary Differences Identify in the following circumstances whether the difference...
General Question/Exercise 16-7 Identify Permanent versus Temporary Differences Identify in the following circumstances whether the difference is a permanent (P) or temporary (T) difference. MACRS depreciation is used for tax purposes but straight-line is used for financial reporting. Magazine subscriptions are taxable when received but recognized for financial reporting as the magazine is delivered. Interest expenses associated with obtaining a loan to invest in tax exempt securities. Warranty expense recorded for financial reporting when products are sold but recorded for...
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...
6) For reporting purposes, deferred tax assets and deferred tax labilities for the same company and...
6) For reporting purposes, deferred tax assets and deferred tax labilities for the same company and tax jurisdiction are: a. Reported separately in the balance sheet. b. Reflected only in the notes to the financial statements. C. Combined with noncurrent deferred tax assets and noncurrent deferred tax liabilities in the balance sheet to show a single net noncurrent among. d. Netted against one another and show as a net current asset or liability in the balance sheet. 7) of the...
Statutory tax rate is affected by which of the following: Tax Regulations Permanent Differences Temporary Differences...
Statutory tax rate is affected by which of the following: Tax Regulations Permanent Differences Temporary Differences All of the options Income tax expense reported in the income statement represents the income tax expenses incurred in the current accounting period True False
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...
Book/Tax Differences Temporary Permanent Difference Reason Book 4,800 1,000 20 5,820 Sales Installment sales Interest Income Required: Determine which book/tax differences are temp or perm Calculate and enter Federal income tax expense Prepare journal entry to record tax expense Calculate Effective Tax Rate Prepare Deferred Tax Reconcilation for Financial stmt footnote Tax 4,800 300 5 5 5,105 (700) (15) (700) Payments not received municipal bond interest 2,350 2,350 Assumptions: DTA and DTL beginning balances = 0 All DTAs and DTLs...
General Question/Exercise 16-7 Identify Permanent versus Temporary Differences Identify in the following circumstances whether the difference is a permanent (P) or temporary (T) difference. MACRS depreciation is used for tax purposes but straight-line is used for financial reporting. Magazine subscriptions are taxable when received but recognized for financial reporting as the magazine is delivered. Interest expenses associated with obtaining a loan to invest in tax exempt securities. Warranty expense recorded for financial reporting when products are sold but recorded for...
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...
6) For reporting purposes, deferred tax assets and deferred tax labilities for the same company and tax jurisdiction are: a. Reported separately in the balance sheet. b. Reflected only in the notes to the financial statements. C. Combined with noncurrent deferred tax assets and noncurrent deferred tax liabilities in the balance sheet to show a single net noncurrent among. d. Netted against one another and show as a net current asset or liability in the balance sheet. 7) of the...
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