buestion 1 At 30 June 2019, Beta Ltd had the following deferred tax balances: Deferred tax liability $18,000 Deferred tax asset 15,000 Beta Ltd recorded a profit before tax of $80,000 for the year to 30 June 2020, which included the following items: Depreciation expense- plant $7,000 Doubtful debts expebse 3,000 Long-service leave expense 4,000 For taxation purposes the following amounts are allowable deductions for the year to 30 June 2020: Tax depreciation - plant $8,000 Bad debts written off 2,000 Depreciation ratesfor taxation purposes are higher than for accounting purposes. A corporate tax rate of 30% applies. Required: a) Determine the taxable income and income tax payable for the year to 30 June 2020. ( b) Determine by what amount the balances of the deferred liability and deferred tax asset will increase or decrease for the year to 30 June 2020 because of depreciation, doubtful debts and long-service leave. c) Prepare the necessary journal entries to account for income tax assuming recognition criteria d) What are the balances of the deferred tax liability and deferred tax asset at are satisfied. 30 June 2020?

buestion 1 At 30 June 2019, Beta Ltd had the following deferred tax balances: Deferred tax liability $18,000 Deferred tax asset 15,000 Beta Ltd recorded a profit before tax of $80,000 for the year to 30 June 2020, which included the following items: Depreciation expense- plant $7,000 Doubtful debts expebse 3,000 Long-service leave expense 4,000 For taxation purposes the following amounts are allowable deductions for the year to 30 June 2020: Tax depreciation - plant $8,000 Bad debts written off 2,000 Depreciation ratesfor taxation purposes are higher than for accounting purposes. A corporate tax rate of 30% applies. Required: a) Determine the taxable income and income tax payable for the year to 30 June 2020. ( b) Determine by what amount the balances of the deferred liability and deferred tax asset will increase or decrease for the year to 30 June 2020 because of depreciation, doubtful debts and long-service leave. c) Prepare the necessary journal entries to account for income tax assuming recognition criteria d) What are the balances of the deferred tax liability and deferred tax asset at are satisfied. 30 June 2020?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 12P: Comprehensive Colt Company reports pretax financial income of 143,000 in 2019. In addition to pretax...

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Comprehensive Colt Company reports pretax financial income of 143,000 in 2019. In addition to pretax income from continuing operations (of which revenues are 295,000), the following items are included in this pretax income: Colts taxable income totals 93,000 in 2019. The difference between the pretax financial income and the taxable income is due to the excess of tax depreciation over financial depreciation on assets used in continuing operations. At the beginning of 2019, Colt had a retained earnings balance of 310.000 and a deferred tax liability of 8,100. During 2019, Colt declared and paid dividends of 48,000. It is subject to tax rates of 15% on the first 50,000 of income and 30% on income in excess of 50,000. Based on proper interperiod tax allocation procedures, Colt has determined that its 2019 ending deferred tax liability is 14,100. Required: 1. Prepare a schedule for Colt to allocate the total 2019 income tax expense to the various components of pretax income. 2. Prepare Colts income tax journal entry at the end of 2019. 3. Prepare Colts 2019 income statement. 4. Prepare Colts 2019 statement of retained earnings. 5. Show the related income tax disclosures on Colts December 31, 2019, balance sheet.
Question 1At 30 June 2019, Beta Ltd had the following deferred tax balances:Deferred tax liability $18,000Deferred tax asset 15,000Beta Ltd recorded a profit before tax of $80,000 for the year to 30 June 2020, which included thefollowing items:Depreciation expense – plant $7,000Doubtful debts expense 3,000Long-service leave expense 4,000For taxation purposes the following amounts are allowable deductions for the year to 30 June 2020:Tax depreciation – plant $8,000Bad debts written off 2,000Depreciation ratesfor taxation purposes are higher than for accounting purposes. A corporate tax rateof 30% applies.Required: answer these all 4 parts of question no 1a) Determine the taxable income and income tax payable for the year to 30 June 2020. b) Determine by what amount the balances of the deferred liability and deferred tax asset willincrease or decrease for the year to 30 June 2020 because of depreciation, doubtful debts andlong-service leave.c) Prepare the necessary journal entries to…
Question 1At 30 June 2019, Beta Ltd had the following deferred tax balances:Deferred tax liability $18,000Deferred tax asset 15,000Beta Ltd recorded a profit before tax of $80,000 for the year to 30 June 2020, which included thefollowing items:Depreciation expense – plant $7,000Doubtful debts expense 3,000Long-service leave expense 4,000For taxation purposes the following amounts are allowable deductions for the year to 30 June 2020:Tax depreciation – plant $8,000Bad debts written off 2,000Depreciation ratesfor taxation purposes are higher than for accounting purposes. A corporate tax rateof 30% applies.Required:a) Determine the taxable income and income tax payable for the year to 30 June 2020. b) Determine by what amount the balances of the deferred liability and deferred tax asset will increase or decrease for the year to 30 June 2020 because of depreciation, doubtful debts and long-service leave. c) Prepare the necessary journal entries to account for income tax assuming…
Question At 30 June 2019, Beta Ltd had the following deferred tax balances:Deferred tax liability $18,000Deferred tax asset 15,000Beta Ltd recorded a profit before tax of $80,000 for the year to 30 June 2020, which included thefollowing items:Depreciation expense – plant $7,000Doubtful debts expense 3,000Long-service leave expense 4,000For taxation purposes the following amounts are allowable deductions for the year to 30 June 2020:Tax depreciation – plant $8,000Bad debts written off 2,000Depreciation ratesfor taxation purposes are higher than for accounting purposes. A corporate tax rateof 30% applies.Required:d) What are the balances of the deferred tax liability and deferred tax asset at 30 June 2020
Question 1 At 30 June 2019, Beta Ltd had the following deferred tax balances: Deferred tax liability $18,000 Deferred tax asset 15,000 Beta Ltd recorded a profit before tax of $80,000 for the year to 30 June 2020, which included the following items: Depreciation expense – plant $7,000 Doubtful debts expense 3,000 Long-service leave expense 4,000 For taxation purposes the following amounts are allowable deductions for the year to 30 June 2020: Tax depreciation – plant $8,000 Bad debts written off 2,000 Depreciation rates for taxation purposes are higher than for accounting purposes. A corporate tax rate of 30% applies. Required: a) Determine the taxable income and income tax payable for the year to 30 June 2020. b) Determine by what amount the balances of the deferred liability and deferred tax asset will increase or decrease for the year to 30 June 2020 because of depreciation, doubtful debts and long-service leave. c) Prepare the necessary journal entries to account for income tax…
Question 1 At 30 June 2019, Beta Ltd had the following deferred tax balances: Deferred tax lability Deferred tax asset $18,000 15,000 Beta Ltd recorded a profit before tax of s80,000 for the year to 30 June 2020, which included the following items: Depreciation expense - plant $7,000 Doubtful debts expense Long-service leave expense 3,000 4,000 For taxation purposes the following amounts are allowable deductions for the year to 30 June 2020: Tax depreciation - plant Bad debts written off $8,000 2,000 Depreciation rates for taxation purposes are higher than for accounting purposes. A corporate tax rate of 30% applies. Required: a) Determine the taxable income and income tax payable for the year to 30 June 2020. b) Determine by what amount the balances of the deferred liability and deferred tax asset will increase or decrease for the year to 30 June 2020 because of depreciation, doubtful debts and long-service leave. c) Prepare the necessary journal entries to account for income tax…
Question 1 At 30 hune 2019, Beta Ltd had the following deferred tax balances: Deferred tan lability Deferred tax asset SI8,000 15,000 Beta Ltd recorded a profit before tax of S80,000 for the year to 30 June 2020, which included the following items: Depreciation expense -plant $7,000 Doubtful debts expense Long service leave expense 4,000 3,000 For taxation purposes the following amounts are allowable deductions for the year to 30 June 2020: Tax depreciation - plant Bad debts written off S8000 2,000 Depreciation rates for taation purposes are higher than for accounting purposes. A corporate tau rate of 3ON applies. Required: a) Determine the taable income and income tax payable for the year to 30 June 2020. b) Determine by what amount the balances of the deferred liability and deferred tax asset will increase or decrease for the year to 30 June 2020 because of depreciation, doubtful debts and long service leave ) Prepare the necessary journal entries to account for income ta assuming…
At 30 June 2019, Beta Ltd had the following deferred tax balances:Deferred tax liability $18,000Deferred tax asset 15,000Beta Ltd recorded a profit before tax of $80,000 for the year to 30 June 2020, which included the following items:Depreciation expense – plant $7,000Doubtful debts expense 3,000Long-service leave expense 4,000For taxation purposes the following amounts are allowable deductions for the year to 30 June 2020:Tax depreciation – plant $8,000Bad debts written off 2,000Depreciation rates for taxation purposes are higher than for accounting purposes. A corporate tax rate of 30% applies. Determine by what amount the balances of the deferred liability and deferred tax asset will increase or decrease for the year to 30 June 2020 because of depreciation, doubtful debts and long-service leave
Maru Mi Company had Taxable Income amounting to P750,000 before considering the following information for taxable year 2021:P 90,000 Net Operating Loss Carry-Over P 8,000 Excess MCIT Carry-OverP 15,000 Creditable Withheld Taxes at SourceP 40,000 Quarterly Tax PaymentsP 5,000 Excess Prior Year Tax CreditsHow much is the Income Tax still payable or due?
Extracts from trial balance at 31 March, 2019 GH¢ Current tax credit balance 1,600,000 Deferred tax liability 5,200,000 The halance on current tax represents the under/over provision of the tax liability for the year ended 31 March, 2018. The required provision for income tax for the year ended 31 March. 2019 is GHe38-8 million. The difference between the carrying amounts of the net assets of the company and their (lower) tax base at 31 March, 2019 is GH¢54 million. The rate of income tax is 25%. Required: Prepare a Statement of Profit or Loss Extract and Statement of Financial Position Extract for 31 March, 2019. t mie ol
At 30 June 2019, Beta Ltd had the following deferred tax balances: Deferred tax liability $18,000Deferred tax asset 15,000 Beta Ltd recorded a profit before tax of $80,000 for the year to 30 June 2020, which included the following items: Depreciation expense – plant $7,000Doubtful debts expense 3,000Long-service leave expense 4,000For taxation purposes the following amounts are allowable deductions for the year to 30 June 2020: Tax depreciation – plant $8,000Bad debts written off 2,000 Depreciation rates for taxation purposes are higher than for accounting purposes. A corporate tax rate of 30% applies. Required: Prepare the necessary journal entries to account for income tax assuming recognition criteria are satisfied. What are the balances of the deferred tax liability and deferred tax asset at 30 June 2020?
At 30 June 2019, Beta Ltd had the following deferred tax balances: Deferred tax liability $18,000Deferred tax asset 15,000 Beta Ltd recorded a profit before tax of $80,000 for the year to 30 June 2020, which included the following items: Depreciation expense – plant $7,000Doubtful debts expense 3,000Long-service leave expense 4,000For taxation purposes the following amounts are allowable deductions for the year to 30 June 2020: Tax depreciation – plant $8,000Bad debts written off 2,000 Depreciation rates for taxation purposes are higher than for accounting purposes. A corporate tax rate of 30% applies. Required: Determine the taxable income and income tax payable for the year to 30 June 2020. Determine by what amount the balances of the deferred liability and deferred tax asset will increase or decrease for the year to 30 June 2020 because of depreciation, doubtful debts and long-service leave.