A-5 For the year ended December 31, 2023, Nash Ltd. reported income before income taxes of $190,500. Prior to 2023 taxable incomeand accounting income was the same each year.In 2023, Nash Ltd. paid $123,900 for advertising; of this amount, $41,300 was expensed in 2023. The remaining $82,600 was treatedas a prepaid expense for accounting purposes and would be expensed equally over the 2024-2025 period. The full $123,900 wasdeductible for tax purposes in 2023.The company paid $32,500 in 2023 for membership in a local golf club (which was not deductible for tax purposes).In 2023 Nash Ltd. began offering a 1-year warranty on all merchandise sold. Warranty expenses for 2023 were $25,200, of which$20,300 was actual repairs for 2023 and the remaining $4,900 was estimated repairs to be completed in 2024.Meal and entertainment expenses totalled $43,200 in 2023, only half of which were deductible for income tax purposes.Depreciation expense for 2023 was $104,900. Capital Cost Allowance (CCA) claimed for the year was $136,700. Depreciation andCCA relate to an asset that was purchased on January 1, 2023 for $524,500.Nash was subject to a 25% income tax rate for 2023. Nash follows IFRS.(d)Record current income taxes for 2023. (Credit account titles are automatically indented when the amount is entered. Do not indentmanually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.)Account Titles and ExplanationDebitCredit

Taxable income is the income subject to tax.The taxable income is used to determine tax liability,…

(d) Record current income taxes for 2023. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation Debit Credit

(d) Record current income taxes for 2023. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation Debit Credit

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 9MC: Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and...

See similar textbooks

Similar questions

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.
In the current year, Madison Corporation had 50,000 of taxable income at a tax rate of 25%. During the year, Madison began offering warranties on its products and has a Warranty liability for financial reporting purposes of 5,000 at the end of the year. Warranty expenses are not deductible until paid for income tax purposes. Prepare the journal entry to record Madisons income taxes at the end of the year.
Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and taxable income for 2020. The prior period adjustment was the result of an error in calculating bad debt expense for 2019. The current tax rate is 30%, and no change in the tax rate has been enacted for future years. When the company applies intraperiod income tax allocation, the prior period adjustment will be shown on the: a. income statement at 12,000 b. income statement at 8,400 (net of 3,600 income taxes) c. retained earnings statement at 12,000 d. retained earnings statement at 8,400 (net of 3,600 income taxes)
For the year ended December 31, 2023, Bramble Ltd. reported income before income taxes of $90,000. In 2023, Bramble Ltd. paid $45,000 for rent; of this amount, $15,000 was expensed in 2023. The remaining $30,000 was treated as a prepaid expense for accounting purposes and would be expensed equally over the 2024-2025 period. The full $45,000 was deductible for tax purposes in 2023. The company paid $72,000 in 2023 for membership in a local golf club (which was not deductible for tax purposes). In 2023 Bramble Ltd. began offering a 1-year warranty on all merchandise sold. Warranty expenses for 2023 were $34,000, of which $26,000 was actual repairs for 2023 and the remaining $8,000 was estimated repairs to be completed in 2024. Meal and entertainment expenses totalled $22,000 in 2023, only half of which were deductible for income tax purposes. Depreciation expense for 2023 was $230,000. Capital Cost Allowance (CCA) claimed for the year was $252,000. Bramble was subject to a 20% income tax…
In 2023, Novak Inc. reported pretax accounting income of $129,100. In 2024, the company had a pretax accounting income of $57,100. In 2025, the company had pretax losses of $205,800. The following year, the company's pretax accounting income was $169,600. Income for tax purposes was the same as for accounting for all years. Novak's tax rate was 25% for 2023 and 2024, 28% for 2025 and 26% for 2026 and subsequent years. The tax rates were all enacted by the beginning of 2023. Prepare the journal entries for the years 2023 to 2026 to record income taxes. Assume that Novak's policy is to carry back any tax losses first, and that at the end of 2025, the loss carryforward benefits are judged more likely than not to be realized in the future. Novak follows IFRS. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order…
For the year ended December 31, 2023, Crane Ltd. reported income before income taxes of $82,000.In 2023, Crane Ltd. paid $45,000 for rent; of this amount, $15,000 was expensed in 2023. The remaining $30,000 was treated as a prepaid expense for accounting purposes and would be expensed equally over the 2024-2025 period. The full $45,000 was deductible for tax purposes in 2023.The company paid $66,000 in 2023 for membership in a local golf club (which was not deductible for tax purposes).In 2023 Crane Ltd. began offering a 1-year warranty on all merchandise sold. Warranty expenses for 2023 were $32,000, of which $26,000 was actual repairs for 2023 and the remaining $6,000 was estimated repairs to be completed in 2024.Meal and entertainment expenses totalled $16,000 in 2023, only half of which were deductible for income tax purposes.Depreciation expense for 2023 was $160,000. Capital Cost Allowance (CCA) claimed for the year was $181,000.Crane was subject to a 20% income tax rate for…