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Requirement 1 | |||||
Future Taxable (Deductions) | Future | Future | |||
Amount | Taxable Amount | Deductible Amount | |||
Current Year 2018 | 2019 | 2020 | |||
Pretax accounting income | $ 82 | ||||
Permanent difference: | |||||
Fine paid | $ 3 | ||||
Temporary differences: | |||||
Installment sales | $ (7) | $ 4 | $ 4 | $ 8 | |
Depreciation | $ (16) | $ 8 | $ 14 | $ 22 | |
Warranties | $ 1 | $ (3) | $ (3) | ||
Paid future absences | $ 16 | $ (10) | $ (6) | $ (16) | |
Loss contingency | $ (2) | ||||
Taxable income (tax return) | $ 77 | $ 30 | $ (19) | ||
Enacted tax rate | 40% | 40% | 40% | ||
Tax payable currently | $ 30.80 | ||||
Deferred tax liability | $ 12.00 | ||||
Deferred tax asset | $ (7.60) | ||||
Deferred Tax Asset | Deferred Tax Liability | ||||
$ 0.80 | $ 1.80 | ||||
$ 6.80 | $ 10.20 | ||||
$ 7.60 | $ 12.00 | ||||
Journal entry at the end of 2021 | |||||
Income tax expense (to balance) | $ 34.20 | ||||
Deferred tax asset (determined above) | $ 6.80 | ||||
Deferred tax liability (determined above) | $ 10.20 | ||||
Income tax payable (determined above) | $ 30.80 | ||||
Requirement 2 | |||||
($ in millions) | |||||
Income before income tax | $ 82.00 | ||||
Income tax expense | $ (34.20) | ||||
Net income | $ 47.80 | ||||
Requirement 3 | |||||
Net noncurrent deferred tax liability ($12-$7.60) | $ 4.40 |
Sherrod, Inc., reported pretax accounting income of $82 million for 2018. The following information relate...
Sherrod, Inc., reported pretax accounting income of $88 million for 2018. The following information relates to differences between pretax accounting income and taxable income: a. Income from installment sales of properties included in pretax accounting income in 2018 exceeded that reported for tax purposes by $7 million. The installment receivable account at year-end had a balance of $8 million (representing portions of 2017 and 2018 installment sales), expected to be collected equally in 2019 and 2020. b. Sherrod was assessed...
Sherrod, Inc., reported pretax accounting income of $76 million for 2018. The following information relates to differences between pretax accounting income and taxable income: a. Income from installment sales of properties included in pretax accounting income in 2018 exceeded that reported for tax purposes by $3 million. The installment receivable account at year-end had a balance of $4 million (representing portions of 2017 and 2018 installment sales), expected to be collected equally in 2019 and 2020. b. Sherrod was assessed...
ONLY NEED REQUIRMENTS 1 AND 3 Sherrod, Inc., reported pretax accounting income of $78 million for 2018. The following information relates to differences between pretax accounting income and taxable income: Income from installment sales of properties included in pretax accounting income in 2018 exceeded that reported for tax purposes by $3 million. The installment receivable account at year-end had a balance of $4 million (representing portions of 2017 and 2018 installment sales), expected to be collected equally in 2019 and...
Sherrod, Inc., reported pretax accounting income of $76 million for 2021. The following information relates to differences between pretax accounting income and taxable income: Income from installment sales of properties included in pretax accounting income in 2021 exceeded that reported for tax purposes by $3 million. The installment receivable account at year-end 2021 had a balance of $7 million (representing portions of 2020 and 2021 installment sales), expected to be collected equally in 2022 and 2023. Sherrod was assessed a...
Sherrod, Inc., reported pretax accounting income of $78 million for 2021. The following information relates to differences between pretax accounting income and taxable income: Income from installment sales of properties included in pretax accounting income in 2021 exceeded that reported for tax purposes by $3 million. The installment receivable account at year-end 2021 had a balance of $4 million (representing portions of 2020 and 2021 installment sales), expected to be collected equally in 2022 and 2023. Sherrod was assessed a...
Sherrod, Inc., reported pretax accounting income of $78 million for 2021. The following information relates to differences between pretax accounting income and taxable income: Income from installment sales of properties included in pretax accounting income in 2021 exceeded that reported for tax purposes by $3 million. The installment receivable account at year-end 2021 had a balance of $4 million (representing portions of 2020 and 2021 installment sales), expected to be collected equally in 2022 and 2023. Sherrod was assessed a...
Sherrod, Inc., reported pretax accounting income of $68 million for 2021. The following information relates to differences between pretax accounting income and taxable income: Income from installment sales of properties included in pretax accounting income in 2021 exceeded that reported for tax purposes by $6 million. The installment receivable account at year-end 2021 had a balance of $8 million (representing portions of 2020 and 2021 installment sales), expected to be collected equally in 2022 and 2023. Sherrod was assessed a...
Sherrod, Inc., reported pretax accounting income of $66 million for 2021. The following information relates to differences between pretax accounting income and taxable income: a. Income from installment sales of properties included in pretax accounting income in 2021 exceeded that reported for tax purposes by $4 million. The installment receivable account at year-end 2021 had a balance of $6 million (representing portions of 2020 and 2021 installment sales). expected to be collected equally in 2022 and 2023. b. Sherrod was...
Sherrod, Inc., reported pretax accounting income of $98 million for 2021. The following information relates to differences between pretax accounting income and taxable income: a. Income from installment sales of properties included in pretax accounting income in 2021 exceeded that reported for tax purposes by $9 million. The installment receivable account at year-end 2021 had a balance of $10 million (representing portions of 2020 and 2021 installment sales), expected to be collected equally in 2022 and 2023. b. Sherrod was...
Sherrod, Inc., reported pretax accounting Income of $92 million for 2021. The following Information relates to differences between pretax accounting Income and taxable income: a. Income from Installment sales of properties included in pretax accounting Income in 2021 exceeded that reported for tax purposes by $6 million. The installment receivable account at year-end 2021 had a balance of $8 million (representing portions of 2020 and 2021 Installment sales), expected to be collected equally In 2022 and 2023. b. Sherrod was...