Homework Answers
Debit to income tax expense for $164
Reason :
= $850 - $30
= $820
Income tax expense = $820 * 20%
= $ 164
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Question 3 3 pts Company A uses straight-line depreciation for financial reporting purposes for equipment costing...
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....
Shannon Polymers uses straight-line depreciation for financial reporting purposes for equipment costing $760,000 and with an...
Shannon Polymers uses straight-line depreciation for financial reporting purposes for equipment costing $760,000 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 $860,000, which includes interest revenue of $24,000 from municipal governmental bonds. Other than the two described, there are no differences between accounting income and taxable income. The...
Shannon Polymers uses stralght-line depreclation for financlal reporting purposes for equipment costing $720,000 and with an...
Shannon Polymers uses stralght-line depreclation for financlal reporting purposes for equipment costing $720,000 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 $820,000, which includes interest revenue of $22,000 from municipal governmental bonds. Other than the two described, there are no differences between accounting income and taxable...
Milo Manufacturing uses straight-line depreciation for financial statement reporting and is able to deduct 100% of...
Milo Manufacturing uses straight-line depreciation for financial statement reporting and is able to deduct 100% of the cost of equipment in the year the equipment is purchased for tax purposes. Four years after its purchase, one of Milo's manufacturing machines has a book value of $600,000. There were no other temporary differences and no permanent differences. Taxable income was $10 million and Milo’s tax rate is 25%. What is the deferred tax liability to be reported in the balance sheet?...
Milo Manufacturing uses straight-line depreciation for financial statement reporting and is able to deduct 100% of...
Milo Manufacturing uses straight-line depreciation for financial statement reporting and is able to deduct 100% of the cost of equipment in the year the equipment is purchased for tax purposes. Four years after its purchase, one of Milo's manufacturing machines has a book value of $620,000. There were no other temporary differences and no permanent differences. Taxable income was $12 million and Milo’s tax rate is 25%. What is the deferred tax liability to be reported in the balance sheet?...
Please help with part 3 Southern Atlantic Distributors began operations in January 2021 and purchased a...
Please help with part 3
Southern Atlantic Distributors began operations in January 2021 and purchased a delivery truck for $40,000. Southern Atlantic plans to use straight-line depreciation over a four-year expected useful life for financial reporting purposes. For tax purposes, the deduction is 50% of cost in 2021, 30% in 2022, and 20% in 2023. Pretax accounting income for 2021 was $440,000, which includes interest revenue of $44,000 from municipal governmental bonds. The enacted tax rate is 25%. Assuming no...
fore farms reported a pretax operating loss of $137 million for financial reporting purposes in 2021....
fore farms reported a pretax operating loss of $137 million for
financial reporting purposes in 2021. Contributing to the loss were
a penalty of $5 million assessed by the environmental protection
agency for violation of a federal law and paid in 2021, and b.) an
estimated loss of $12 million from accruing a loss contingency. The
loss will be tax deductible when paid in 2022. The enacted tax rate
is 25%. There were no temporary differences at the beginning of...
Ayres Services acquired an asset for $88 million in 2018. The asset is depreciated for financial...
Ayres Services acquired an
asset for $88 million in 2018. The asset is depreciated for
financial reporting purposes over four years on a straight-line
basis (no residual value). For tax purposes the asset’s cost is
depreciated by MACRS. The enacted tax rate is 40%. Amounts for
pretax accounting income, depreciation, and taxable income in 2018,
2019, 2020, and 2021 are as follows:
Ayres Services acquired an asset for $88 million in 2018. The asset is depreciated for financial reporting purposes...
Ayres Services acquired an asset for $152 million in 2021. The asset is depreciated for financial...
Ayres Services acquired an asset for $152 million in 2021. The asset is depreciated for financial reporting purposes over four years on a straight-line basis (no residual value). For tax purposes the asset’s cost is depreciated by MACRS. The enacted tax rate is 25%. Amounts for pretax accounting income, depreciation, and taxable income in 2021, 2022, 2023, and 2024 are as follows: ($ in millions) 2021 2022 2023 2024 Pretax accounting income $ 375 $ 395 $ 410 $ 445...
Listed below are items that are commonly accounted for differently for financial reporting purposes than they...
Listed below are items that are commonly accounted for
differently for financial reporting purposes than they are for tax
purposes.
For each item below, indicate whether it involves:
(1)
A temporary difference that will result in future deductible
amounts and, therefore, will usually give rise to a deferred income
tax asset.
(2)
A temporary difference that will result in future taxable
amounts and, therefore, will usually give rise to a deferred income
tax liability.
(3)
A permanent difference.
Use the...
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....
Shannon Polymers uses straight-line depreciation for financial reporting purposes for equipment costing $760,000 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 $860,000, which includes interest revenue of $24,000 from municipal governmental bonds. Other than the two described, there are no differences between accounting income and taxable income. The...
Shannon Polymers uses stralght-line depreclation for financlal reporting purposes for equipment costing $720,000 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 $820,000, which includes interest revenue of $22,000 from municipal governmental bonds. Other than the two described, there are no differences between accounting income and taxable...
Please help with part 3
Southern Atlantic Distributors began operations in January 2021 and purchased a delivery truck for $40,000. Southern Atlantic plans to use straight-line depreciation over a four-year expected useful life for financial reporting purposes. For tax purposes, the deduction is 50% of cost in 2021, 30% in 2022, and 20% in 2023. Pretax accounting income for 2021 was $440,000, which includes interest revenue of $44,000 from municipal governmental bonds. The enacted tax rate is 25%. Assuming no...
fore farms reported a pretax operating loss of $137 million for
financial reporting purposes in 2021. Contributing to the loss were
a penalty of $5 million assessed by the environmental protection
agency for violation of a federal law and paid in 2021, and b.) an
estimated loss of $12 million from accruing a loss contingency. The
loss will be tax deductible when paid in 2022. The enacted tax rate
is 25%. There were no temporary differences at the beginning of...
Ayres Services acquired an
asset for $88 million in 2018. The asset is depreciated for
financial reporting purposes over four years on a straight-line
basis (no residual value). For tax purposes the asset’s cost is
depreciated by MACRS. The enacted tax rate is 40%. Amounts for
pretax accounting income, depreciation, and taxable income in 2018,
2019, 2020, and 2021 are as follows:
Ayres Services acquired an asset for $88 million in 2018. The asset is depreciated for financial reporting purposes...
Listed below are items that are commonly accounted for
differently for financial reporting purposes than they are for tax
purposes.
For each item below, indicate whether it involves:
(1)
A temporary difference that will result in future deductible
amounts and, therefore, will usually give rise to a deferred income
tax asset.
(2)
A temporary difference that will result in future taxable
amounts and, therefore, will usually give rise to a deferred income
tax liability.
(3)
A permanent difference.
Use the...
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