Ross Co. began operations in the current year. Use the following facts to answer this question....
Ross Co. began operations in the current year. Use the following facts to answer this question. * Ross reported $225,000 in income before income taxes for the year. * Ross' current-year tax depreciation exceeded its book depreciation by $25,000. * Ross had nondeductible book expenses of $10,000 related to permanent differences. * Ross' tax rate for the current year is 40%. * Ross’ tax rate for subsequent years is 35%. In its current-year balance sheet, what amount of deferred income tax liability should Ross report?
|
$8,750 |
||
|
$10,000 |
||
|
$12,250 |
||
|
$14,000 |
Homework Answers
Answer
A. $8,750
Explanation :
Note :
- Only temporary difference is consider for deferred income tax calculation. Thus only one adjustment ie difference in depreciation as per tax & books is a temporary difference while nondeductible book expenses is permanent difference therefore it wont be consider for deferred income tax calculation.
- For deferred income tax calculation future enated tax rate is to be applied.
Deferred income tax liability should Ross report = $25,000 * 35 % = $8,750
Add Answer to:
Ross Co. began operations in the current year. Use the following
facts to answer this question....
Sage Corporation began operations in 2017 and reported pretax financial income of $230,000 for the year....
Sage Corporation began operations in 2017 and reported pretax
financial income of $230,000 for the year. Sage’s tax depreciation
exceeded its book depreciation by $40,000. Sage’s tax rate for 2017
and years thereafter is 30%. Assume this is the only difference
between Sage’s pretax financial income and taxable income.
Prepare the journal entry to record the income tax expense,
deferred income taxes, and income taxes payable.
(Credit account titles are automatically indented when
amount is entered. Do not indent manually....
Relix, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year...
Relix, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year before recording any net deferred tax asset or net deferred tax liability. Tax Debit/(Credit) Book Debit/(Credit) Assets Cash $500 $500 Accounts receivable 8,000 8,000 Buildings 750,000 750,000 Accumulated depreciation (450,000) (380,000) Furniture and fixtures 70,000 70,000 Accumulated depreciation (46,000) (38,000) Total assets $332,500 $410,500 Liabilities Accrued litigation expense $0 ($50,000) Note payable (78,000) (78,000) Total liabilities ($78,000) ($128,000)...
Swordfish Corporation reported pretax book income of $1,000,000. During the current year, the net reserve for...
Swordfish Corporation reported pretax book income of $1,000,000. During the current year, the net reserve for warranties increased by $25,000. In addition, book depreciation exceeded tax depreciation by $100,000. In prior years, tax depreciation exceeded book depreciation by a cumulative amount of $500,000. Finally, Swordfish subtracted a dividends received deduction of $15,000 in computing its current-year taxable income. Swordfish's deferred income tax expense or benefit would be: $23,100 net deferred tax benefit. $26,250 net deferred tax benefit. $26,250 net deferred...
Fill-in choices are add: or less: Problem 3-34 (LO. 2) Relix, Inc., is a domestic corporation...
Fill-in choices are add: or less:
Problem 3-34 (LO. 2) Relix, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year before recording any net deferred tax asset or net deferred tax liability. Tax Debit/(Credit) Book Debit/Credit) Assets Cash $500 $500 Accounts receivable 8,000 8,000 750,000 750,000 Buildings Accumulated depreciation Furniture and fixtures Accumulated depreciation Total assets (450,000) 70,000 (46,000) (380,000) 70,000 (38,000) $332,500 $410,500 Liabilities Accrued litigation expense...
Problem 3-42 (LO. 2) Kantner, Inc., is a domestic corporation with the following balance sheet for...
Problem 3-42 (LO. 2) Kantner, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Tax Debit/Credit) Book Debit/Credit) Assets Cash Accounts receivable Buildings Accumulated depreciation Furniture and fixtures $1,000 9,000 850,000 (700,000) 40,000 (10,000) $190,000 $1,000 9,000 850,000 (620,000) 40,000 Accumulated depreciation (8,000) $272,000 Total assets Liabilities SO Accrued warranty expense Note payable (16,000) ($40,000) (16,000) ($56,000) ($16,000) Total liabilities Stockholders' Equity Paid-in capital Retained earnings ($50,000) (124,000)...
The following information relates to Franklin Freightways for its first year of operations (data in millions...
The following information relates to Franklin Freightways for its first year of operations (data in millions of dollars): $299 Pretax accounting income: Pretax accounting income included: Overweight fines (not deductible for tax purposes) Depreciation expense Depreciation in the tax return 5 80 160 The applicable tax rate is 25%. There are no other temporary or permanent differences. Franklin's balance sheet at the end of its first year would report: Multiple Choice A deferred tax liability of $20 million among noncurrent...
Giada Foods reported $940 million in income before income taxes for 2011, its first year of...
Giada Foods reported $940 million in income before income taxes for 2011, its first year of operations. Tax depreciation exceeded depreciation for financial reporting purposes by $100 million. The company also had non-tax-deductible expenses of $80 million relating to permanent differences. The income tax rate for 2011 was 35%, but the enacted rate for years after 2011 is 40%. The balance in the deferred tax liability in the December 31, 2011, balance sheet is A. $35 million. B. $16 million....
Information for Hobson Corp. for the current year ($ in millions): Income from continuing operations before...
Information for Hobson Corp. for the current year ($ in millions): Income from continuing operations before tax $ 155 Loss on discontinued operation (pretax) 32 Temporary differences (all related to operating income): Accrued warranty expense in excess of expense included in operating income 10 Depreciation deducted on tax return in excess of depreciation expense 25 Permanent differences (all related to operating income): Nondeductible portion of entertainment expense 5 The applicable enacted tax rate for all periods is 25%. How much...
Prance, Inc., earns pretax book net income of $1,141,000 in 2019. Prance acquires a depreciable asset...
Prance, Inc., earns pretax book net income of $1,141,000 in 2019. Prance acquires a depreciable asset that year, and first-year tax depreciation exceeds book depreciation by $114,100. Prance reported no other temporary or permanent book-tax differences. The pertinent U.S. Federal corporate income tax rate is 21%, and Prance earns an after-tax rate of return on capital of 8%. Enter below the Prance's 2019 deferred tax expense and any deferred tax asset or liability. If required, round your answer to nearest...
Omega Co. owns a piece of equipment. Based on the following facts, what is the appropriate...
Omega Co. owns a piece of equipment. Based on the following facts, what is the appropriate 12/31/18 deferred tax balance on Omega's balance sheet with respect to this equipment? 12/31/18 Original cost $500,000 Accumulated book depreciation $100,000 Accumulated tax depreciation $300,000 Applicable income tax rate 30% $30,000 deferred tax asset $60,000 deferred tax asset $30,000 deferred tax liability $60,000 deferred tax liability
Sage Corporation began operations in 2017 and reported pretax
financial income of $230,000 for the year. Sage’s tax depreciation
exceeded its book depreciation by $40,000. Sage’s tax rate for 2017
and years thereafter is 30%. Assume this is the only difference
between Sage’s pretax financial income and taxable income.
Prepare the journal entry to record the income tax expense,
deferred income taxes, and income taxes payable.
(Credit account titles are automatically indented when
amount is entered. Do not indent manually....
Fill-in choices are add: or less:
Problem 3-34 (LO. 2) Relix, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year before recording any net deferred tax asset or net deferred tax liability. Tax Debit/(Credit) Book Debit/Credit) Assets Cash $500 $500 Accounts receivable 8,000 8,000 750,000 750,000 Buildings Accumulated depreciation Furniture and fixtures Accumulated depreciation Total assets (450,000) 70,000 (46,000) (380,000) 70,000 (38,000) $332,500 $410,500 Liabilities Accrued litigation expense...
Problem 3-42 (LO. 2) Kantner, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Tax Debit/Credit) Book Debit/Credit) Assets Cash Accounts receivable Buildings Accumulated depreciation Furniture and fixtures $1,000 9,000 850,000 (700,000) 40,000 (10,000) $190,000 $1,000 9,000 850,000 (620,000) 40,000 Accumulated depreciation (8,000) $272,000 Total assets Liabilities SO Accrued warranty expense Note payable (16,000) ($40,000) (16,000) ($56,000) ($16,000) Total liabilities Stockholders' Equity Paid-in capital Retained earnings ($50,000) (124,000)...
The following information relates to Franklin Freightways for its first year of operations (data in millions of dollars): $299 Pretax accounting income: Pretax accounting income included: Overweight fines (not deductible for tax purposes) Depreciation expense Depreciation in the tax return 5 80 160 The applicable tax rate is 25%. There are no other temporary or permanent differences. Franklin's balance sheet at the end of its first year would report: Multiple Choice A deferred tax liability of $20 million among noncurrent...
Prance, Inc., earns pretax book net income of $1,141,000 in 2019. Prance acquires a depreciable asset that year, and first-year tax depreciation exceeds book depreciation by $114,100. Prance reported no other temporary or permanent book-tax differences. The pertinent U.S. Federal corporate income tax rate is 21%, and Prance earns an after-tax rate of return on capital of 8%. Enter below the Prance's 2019 deferred tax expense and any deferred tax asset or liability. If required, round your answer to nearest...
Most questions answered within 3 hours.
-
The EPA wants to test a randomly selected sample of n
n
water specimens and estimate...
asked 3 minutes ago -
A researcher performs a hypothesis test to test the claim that
for a particular manufacturer, the...
asked 6 minutes ago -
Prepare the adjusting entries, and post to the T-accounts.
a.
Office Supplies used during the month,...
asked 7 minutes ago -
G. Li, B. C. Ooi, J.
Feng, J. Wang, and L. Zhou. EASE: an effective 3-in-1...
asked 8 minutes ago -
The comparisons of Scholastic Aptitude Test (SAT) scores based
on the highest level of education attained...
asked 14 minutes ago -
A long solenoid has a diameter of 9.97 cm. When a current i
exists in its...
asked 22 minutes ago -
1. A motorcycle rider travels along a straight line with
constant velocity. He then throws a...
asked 39 minutes ago -
You are stopped at a red light at a freeway on-ramp. When the
light turns green,...
asked 37 minutes ago -
The freezing point of water H2O is 0.00°C at 1 atmosphere. How
many grams of manganese(II)...
asked 39 minutes ago -
explain the motives and methods for intrusion of the MS and Linux
operating systems
asked 38 minutes ago -
Are our social identities a) chosen for us or b) open to
negotiation? Pick a position...
asked 47 minutes ago -
A charge of -6 micro-coulombs is placed at the origin, a charge
of +7 micro-coulombs is...
asked 53 minutes ago