A company overstated its liability for warranties by $120,000. Its tax rate is 30%. As a result of this error, income tax expense is: Multiple Choice Unaffected. Overstated by $36,000. Understated by $36,000.
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- In 20X6, Dalia Corp., a calendar fiscal-year company, discovered that depreciation expense was erroneously overstated $67,000 in both 20X4 and 20X5 for financial reporting purposes. Net income in 20X6 is correct. The tax rate is 25%. The error was made only for financial reporting, affecting depreciation and deferred income tax accounts. CCA had been recorded correctly, and thus there will be ho change in taxes payable. Additional information: 20X6 20X5 Beginning retained earnings $454,000 Earnings (includes error in 20X5) Dividends declared 85,400 62,200 $430,400 95,900 72,300 Required: 1. Record the entry in 20X6 to correct the error. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 Record the entry for 20X6 to correct the error.At the end of the current year, a company overstated prepaid insurance by $76,000 and understated supplies expense by $109,000. Its effective tax rate is 20%. As a result of this error, net income is:At the end of the current year, a company overstáted prepaid insurance by $62,000 and understated supplies expense by $108,000. Its effective tax rate is 20%. As a result of this error, net income is: Multiple Choice Understated by $36,800. Overstated by $36,800. Overstated by $136,000. Understated bý $136,000.
- In 20X6, Dalia Corp., a calendar fiscal-year company, discovered that depreciation expense was erroneously overstated $68,000 in both 20X4 and 20X5 for financial reporting purposes. Net income in 20X6 is correct. The tax rate is 35%. The error was made only for financial reporting, affecting depreciation and deferred income tax accounts. CCA had been recorded correctly, and thus there will be no change in taxes payable. Additional information: Z0X6 Beginning retained earnings $456,000 zexs $432,500 Earnings (includes error in 20x5) Dividends declared 85,800 62,500 96,400 72,900 Required: 1. Record the entry in 20X6 to correct the error. (If no entry is required for a transaction/event, select "No Journal entry required" In the first account field.) Answer is not complete. General Journal Debit Credit 136,000 23,800x 112,200x No 1 Date 20X6 Deferred income tax liability Retained earnings, error correction 2. Prepare the comparative retained earnings section of the statement of changes…In 20X6, Dalia Corp., a calendar fiscal-year company, discovered that depreciation expense was erroneously overstated $67,000 in both 20X4 and 20X5 for financial reporting purposes. Net income in 20X6 is correct. The tax rate is 25%. The error was made only for financial reporting, affecting depreciation and deferred income tax accounts. CCA had been recorded correctly, and thus there will be no change in taxes payable. Additional Information: 20X6 20X5 Beginning retained earnings $454,000 $430,400 Earnings (includes error in 20X5) Dividends declared 85,400 95,900 62,200 72,300In 20X6, Dalia Corp., a calendar fiscal-year company, discovered that depreciation expense was erroneously overstated $58,000 in both 20X4 and 20X5 for financial reporting purposes. Net income in 20X6 is correct. The tax rate is 30%. The error was made only for financial reporting, affecting depreciation and deferred income tax accounts. CCA had been recorded correctly, and thus there will be no change in taxes payable. Additional information: 20X6 S Beginning retained earnings $446,000 20X5 $424,100 Earnings (includes error in 20x5) Dividends declared 83,800 61,300 94,200 2,300 Required: 1. Record the entry in 20X6 to correct the error. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
- A company has accounts receivable of $300 000 and an associated doubtful debts allowance of $60 000. The revenue associated with the accounts receivable of $300 000 has already been included in taxable profit. The doubtful debts will be deductible when the amount is actually written off as bad with a related deduction to accounts receivable. REQUIRED a) Assuming that the tax rate is 30 percent, what is the amount of the temporary difference? b) Does this give rise to a deferred tax asset or a deferred tax liability, and what is the amount of the deferred tax asset/liability Please donot provide solution in image format provide solution in step by step format and asapMisty Company reported the following before-tax items during the current year: Sales revenue Selling and administrative expenses. Restructuring charges. Loss on discontinued operations Misty's effective tax rate is 40%. What is Misty's net income for the current year? $148. $168. $112. None of these answer choices are correct. $600 250 20 50 IA company has a temporary difference due to doubtful accounts (i.e., bad debt expense). For fiscal year 2012, its Income Tax Payable was $10,000 greater than its Income Tax Expense. What happened to deferred taxes in 2012? Deferred Tax Liabilities decreased by $10,000 Deferred Tax Assets increased by $10,000 Deferred Tax Liabilities increased by $10,000 Deferred Tax Assets decreased by $10,000 There was no effect on Deferred Tax Assets or Deferred Tax Liabilities O O O
- A company has a temporary difference due to doubtful accounts (i.e., bad debt expense). For fiscal year 2012, its Income Tax Payable was $10,000 less than its Income Tax Expense. What happened to deferred taxes in 2012? Deferred Tax Liabilities increased by $10,000 Deferred Tax Liabilities decreased by $10,000 Deferred Tax Assets increased by $10,000 Deferred Tax Assets decreased by $10,000 There was no effect on Deferred Tax Assets or Deferred Tax Liabilities Why the answer "Deferred Tax Liabilities increased by $10,000" is wrong? What's the difference between "increase deferred tax liability" and "decrease deferred tax asset" or "increase deferred tax asset" and "decrease deferred tax liability" Thanks a lot.4. Magic Company failed to recognize accruals and prepayments during its first year of operations. The pre-tax earnings, accruals and prepayments at the end of the year were: P5,000,000 Pre-tax profit Items not recognized at year-end were as follows: Prepaid insurance Accrued wages Rent revenue collected in advance Interest receivable 200,000 250,000 300,000 100,000 The correct amount of pre-tax profit should be A. P4,750,000. B. P4,950,000. C. P5,000,000. D. P5,250,000.XYZ Corporation has one asset worth $450,000. Accumulated Depreciation to date is $190,000 and accumulated CCA is $220,000. The Corporation also recorded warranty expenses of $30,000. To date, no customers have required warranty service, so no warranty expenditures have been made. Assuming the tax rate is constant at 40%, this will result in: Question 18Select one: a. A net deferred income tax liability of $12,000 b. No temporary difference C. A net deferred income tax asset of $12,000 d. A net deferred income tax asset of $30,000