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Sunland Company reports pretax financial income of $72,000 for
2017. The following items cause taxable income to be different than
pretax financial income.
1.
Depreciation on the tax return is greater than depreciation on
the income statement by $14,700.
2.
Rent collected on the tax return is greater than rent
recognized on the income statement by $24,200.
3.
Fines for pollution appear as an expense of $11,900 on the
income statement.
Sunland’s tax rate is 40% for all years, and...
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Pearl Company reports pretax financial income of $65,800 for
2020. The following items cause taxable income to be different than
pretax financial income.
1.
Depreciation on the tax return is greater than depreciation on
the income statement by $16,700.
2.
Rent collected on the tax return is greater than rent
recognized on the income statement by $20,500.
3.
Fines for pollution appear as an expense of $10,200 on the
income statement.
Pearl’s tax rate is 30% for all years, and...
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Sheridan Company began operations at the beginning of 2021. The
following information pertains to this company.
1.
Pretax financial income for 2021 is $85,000.
2.
The tax rate enacted for 2021 and future years is
20%.
3.
Differences between the 2021 income statement and
tax return are listed below:
(a)
Warranty expense accrued for financial reporting purposes
amounts to $6,900. Warranty deductions per the tax return amount to
$2,100.
(b)
Gross profit on construction contracts using the
percentage-of-completion method per...
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Buffalo Inc.’s only temporary difference at the beginning and
end of 2016 is caused by a $3,300,000 deferred gain for tax
purposes for an installment sale of a plant asset, and the related
receivable (only one-half of which is classified as a current
asset) is due in equal installments in 2017 and 2018. The related
deferred tax liability at the beginning of the year is $1,320,000.
In the third quarter of 2016, a new tax rate of 34% is enacted...
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Exercise 19-4
Tamarisk Company reports pretax financial income of $72,600 for
2017. The following items cause taxable income to be different than
pretax financial income.
1.
Depreciation on the tax return is greater than depreciation on
the income statement by $14,500.
2.
Rent collected on the tax return is greater than rent
recognized on the income statement by $21,700.
3.
Fines for pollution appear as an expense of $11,700 on the
income statement.
Tamarisk’s tax rate is 30% for all...
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Problem 6-04A a
The management of Metlock, Inc. asks your help in determining
the comparative effects of the FIFO and LIFO inventory cost flow
methods. For 2022, the accounting records show these data.
Inventory, January 1 (14,500 units)
$ 58,000
Cost of 125,000 units purchased
550,600
Selling price of 98,000 units sold
750,000
Operating expenses
128,000
Units purchased consisted of 36,000 units at $4.20 on May 10;
63,000 units at $4.40 on August 15; and 26,000 units at $4.70 on...
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The completed financial statement columns of the spreadsheet for
Bramble Company are as follows.
Bramble Company
Worksheet
For the Year Ended December 31, 2022
Income Statement
Balance Sheet
Account
No.
Account Titles
Dr.
Cr.
Dr.
Cr.
101
Cash
8,800
112
Accounts Receivable
10,800
130
Prepaid Insurance
2,900
157
Equipment
24,100
158
Accumulated Depreciation—Equip.
4,400
201
Accounts Payable
9,000
212
Salaries and Wages Payable
2,500
311
Common Stock
19,300
320
Retained Earnings
8,300
332
Dividends
19,000
400
Service Revenue
59,800
622...
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Exercise 13-4
On January 1, 2014, Trenten Systems, a U.S.-based company,
purchased a controlling interest in Grant Management Consultants
located in Zurich, Switzerland. The acquisition was treated as a
purchase transaction. The 2014 financial statements stated in Swiss
francs are given below.
GRANT MANAGEMENT CONSULTANTS
Comparative Balance Sheets
January 1 and December 31, 2014
Jan. 1
Dec. 31
Cash and Receivables
19,600
54,000
Net Property, Plant, and Equipment
40,000
36,600
Totals
59,600
90,600
Accounts and Notes Payable
30,100
32,100
Common...
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Here are comparative statement data for Duke Company and Lord
Company, two competitors. All balance sheet data are as of December
31, 2020, and December 31, 2019.
Duke Company
Lord Company
2020
2019
2020
2019
Net sales
$1,884,000
$559,000
Cost of goods sold
1,079,532
296,829
Operating expenses
259,992
79,937
Interest expense
7,536
4,472
Income tax expense
54,636
6,149
Current assets
320,000
$314,200
82,300
$78,600
Plant assets (net)
521,700
500,000
139,200
124,500
Current liabilities
65,400
74,600
36,400
30,600
Long-term liabilities
108,400...
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PRINTER CALCULATOR FULL SCREEN Question 12 Pronghorn Company reports pretax financial income of $68,400 for 2017. The following items cause taxable income to be different than pretax financial income. 1. Depreciation on the tax return is greater than depreciation on the income statement by $17,000. 2. Rent collected on the tax return is greater than rent recognized on the income statement by $21,000. 3. Fines for pollution appear as an expense of $10,300 on the income statement Pronghorn's tax rate...