hen financial income is higher than taxable income and no permanent differences, the company most probably will: Group of answer choices report a higher income tax expense. report a lower income tax expense. report an income tax benefit. report a deferred tax asset.

hen financial income is higher than taxable income and no permanent differences, the company most probably will: Group of answer choices report a higher income tax expense. report a lower income tax expense. report an income tax benefit. report a deferred tax asset.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter12: Liabilities: Off-balance-sheet Financing, Retirement Benefits, And Income Taxes

Section: Chapter Questions

Problem 17Q

See similar textbooks

Related questions

Q: Swifty Company uses the perpetual inventory system and the moving-average method to value…

A: Inventory valuation is based on the flow of exemption used by the company. There are many methods…

Q: Using the Tax Schedule for Head of Household, calculate the tax for a head of household with a…

A: Income tax payable is an obligation for the tax payers to the government on the taxable income.…

Q: rue or False: Sarah is a manager who pays workers less than what they deserve because she knows they…

A: Any action can be termed as illegal only when it is against the law. An unethical action that is not…

Q: The firm with the largest ratio of fixed costs to total costs automatically gets the greatest…

A: Lets understand the basics. Fixed cost is a cost which is fixed over a period of time. It includes…

Q: Moyas Corporation sells a single product for $20 per unit. Last year, the company's sales revenue…

A: Formula: Break even point in units = Fixed cost / Unit contribution margin. Division of unit…

Q: The statement of financial position for the partnership of AA, BB and CC who share profits in the…

A: Partnership is a formal arrangement by two or more parties to manage and operate a business and…

Q: PROBLEMS Problem 20-1 (IFRS)

A: These are the accounting transactions that are having a monetary impact on the financial statement…

Q: The following are the composition of the total gross income of ABC Corp. a domestic corporation…

A: MCIT is also written as minimum corporate income tax. Given that, Gross income from operations =…

Q: e Php 1,150,000.00 and Php 500,000.00, respectively. She opted to avail of the 8% preferential…

A: Income tax payable is a type of account in the current liabilities area of a company's balance…

Q: Record this series of transactions in the general journal of Company B (The company records…

A: Journal Entry It is important for the company to include the required work in the journal in order…

Q: A. What amount should be reported as basic earnings per share? B. What amount should be reported as…

A: Given, Net income is P11,000,000 Outstanding shares issued on Jan 2 is 1,500,000 On Jan 3 entered…

Q: On March 1, 2022, True Company exchanged an old machine which cost P 1,200,000 and was 50%…

A: Journal entry is the primary step to record the transaction in the books of account. Depreciation…

Q: Ramos, Inc. began work in 2017 on contract #3814. The contract price is $7,200,000. The contract is…

A: when there is percentage of completions is applied in order to calculate the profit till date. the…

Q: 3. What is the total spending variance? a. P4,000 unfavorable b. P3,000 unfavorable c. P4,000…

A: Spending Variance A spending variance is the difference between the actual amount of a particular…

Q: The following information is available from the current period financial statements: Net income…

A: The amount of money generated by a corporation by continuous, regular commercial activity, such as…

Q: Company X is a manufacturing firm with total liabilities of Php3,000,000. During the year, it…

A: The borrowing costs can be defined as the cost of taking a loan that is interest costs. Interest…

Q: 2. A bank offers a 272- day discounted loan at a simple discount rate of 12%. (a) How much money…

A: Solution Concept Simple interest rate is the rate that does not have the effect of compounding To…

Q: Explain with examples, the 4 types of expropriatio for minority shareholders, namely:

A: Minority shareholders refer to those shareholders who own less than 50% of the total shares of a…

Q: . S1: Minimum corporate income tax (MCIT) is imposable on all domestic and resident foreign…

A: Mimimum corporation Income tax is chargeable @ 2% (if MCIT is greater than regular income tax) on…

Q: On January 1, 2021, Robin Company received a grant of P1,500,000 from the government to subsidize…

A: Solution This question relates to standard accounting for government grants Whenever the grant is…

Q: On December 31, 2022, ABC Corporation combined net income together with its Bicol branch amounted to…

A: Annual depreciation expense = (Cost - salvage value)/useful life = 200,000/5…

Q: Questions 20 to 23 are based on the following information: On January 1, 2016, Telespace Inc. grants…

A: calculation of deferred tax expenses are as follows

Q: On January 1, 2021, Robin Cormpany received a grant of P1,500,000 from the government to subsidize…

A: Government Grant: Instead than acting as an incentive to carry out specified expenditures, a…

Q: On January 1, 2021, Tonge Industries had outstanding 540,000 common shares ($1 par) that originally…

A: Basic earnings per share: - Basic EPS measures how much a business earns per share without going…

Q: Luther Manufacturing uses an activity-based cost system. The company produces Model 0 and Model J.…

A: The activity rate is calculated as estimated overhead cost for the activity divided by estimated…

Q: Sherwin Company uses straight line depreciation for its property, plant, and equipment, which,…

A: Depreciation is an expense, charged against the value of fixed assets. It can be calculated using…

Q: a 5-year useful life and, no salv: llowing four methods of depred

A: Given as, Investment= $100, 000 Life= 5 years Percentage= 10 %.

Q: An entity is preparing its financial statements for the first time in accordance with PFRS for SMEs…

A: Financial statements are the reports presenting the financial position and profitability of an…

Q: The Rollins Company has office employees and shipping employees. A summary of their earnings and…

A: Total social Security tax payable = 77.90+67.36 = 145.26

Q: 5. How should accounting fees for acquisition be treated? A. Expensed in the period of acquisition…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Juan Company purchased four convenience store buildings on January 1, 2015 for a total of…

A: Impairment loss = Carrying value of the assets - Recoverable value of the assets where, The…

Q: 5. Compute the following financial ratios for 2015 and 2016 and interpreting the results in the…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: dware store to compete against Home Depot, when Home Depot can

A: Home depot : World's largest home improvement retailer having a huge customer base across US and…

Q: Determine the unadjusted BOOK balance using the following data provided by Ilustre Company: Balance…

A: q = Balance per bank statement + Deposit in transit - Amount erroneously credited by bank -…

Q: 1. Describe the quality of following types of evidence giving two examples of each form of evidence…

A: An auditor verifies the accuracy of reported business transactions. Auditors are responsible for…

Q: Required Prepare a vertical analysis of both the balance sheets and income statements for Year 4 and…

A: The vertical analysis is performed to compare the element of balance sheet with respect to total…

Q: On March 31, 20X1, Home Decorating Pavilion received a bank statement showing a balance of $9,650.…

A: Bank reconciliation statement is used to rectify the difference between the cash balance as per…

Q: CLASS ACTIVITY:CASE PROBLEM The Overland Company wants to develop a cost estimating equation for its…

A: The high low method is used to separate the fixed and variable costs from the mixed costs of the…

Q: A lease agreement whereby the lessee recognized rent expense which is always equals to the rent…

A: The lease is a type of agreement between the lessor who is the asset owner and the lessee who takes…

Q: Calculate the Direct expenses and factory cost from the following information: Direct Labor RO…

A: Solution Concept While preparing cost sheet statement prime cost and factory cost shall be shown…

Q: Unrealized los

A: Meaning: Deferred tax is defined as tax effect due to timing difference i.e. difference between…

Q: 3,274,000 58,126,000 196,719,000 354,959,000

A: Given as,

Q: 12. A bank offers a 272 - day discounted loan at a simple discount rate of 12%. (a) How much money…

A: Simple discount loan is the loan which is given to the receiver after applying a simple discount…

Q: A taxable income always results when a. none of the choices. b. revenues exceed the cost of goods…

A: Taxable income is the value at which the tax is calculated by the company.It is calculated by…

Q: Land the forward.rates for the Brazilan Real Spot Rate Fow (Delivery c 2021) December 1, 2020…

A: It is a contract under which a business consents to purchase a specific measure of a foreign…

Q: narket value of is 80 million pon

A: Duration of security tells us that how much will be change in value of security with change in…

Q: How much is the contributions receivable to be presented in the statement of financial position of…

A: solution concept Whenever there are pledges made by the contributor , the estimation relating to its…

Q: YOU ARE REQUIRED TO: 1. Prepare the entries in the General journal to record the events described…

A: Robert and Donald are partners sharing partnership profits and losses in the ratio of 3:2. They…

Q: Chadwick Enterprises, Inc., operates several restaurants throughout the Midwest. Three of its…

A: Assets are the future benefit of the company that would have to be sacrificed in order to pay off…

Q: Benoit Company produces three products—A, B, and C. Data concerning the three products follow (per…

A: The contribution margin is calculated by deducting the variable cost from the sales revenues of the…

Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

When financial income is higher than taxable income and no permanent differences, the company most probably will:

Group of answer choices

report a higher income tax expense.

report a lower income tax expense.

report an income tax benefit.

report a deferred tax asset.

Definition Definition Estimated future tax made while preparing accounts. Deferred tax is estimated based on past and present transactions from financial statements. It is not the actual tax that needs to be paid or is refundable from the revenue authority; it is an accounting entry. It is necessary to account for deferred tax due to difference between accounting profits and taxable profits.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

A reduction in the statutory tax rate would most likely benefi t the company’s:A . income statement and balance sheet.B . income statement but not the balance sheet.C . balance sheet but not the income statement.
Which cost flow assumption must be used for financial reporting if it is also used for tax reporting? Multiple Choice LIFO. FIFO. Weighted-average. Any assumption can be used regardless of the tax reporting.
explain what a growing balance in the deffered income tax liability is likely to indicate about a company's net income relative to its taxable income. Why might investment professional view this situation positively? negatively?
Which option is the correct definition of tax base? Select one: a. Tax base is the amount the asset or liability is recorded at in the accounting records. b. Tax base is a comparing the balance sheet derived using accounting rules with balance sheet that would be derived from taxation rules c. Tax base is the recognition of assets and liabilities in the balance sheet based on the differences between accounting and tax values of assets and liabilities. d. Tax base is defined as the amount that is attributed to an asset or liability for tax purposes.
Select the best answer. An example of investment income that would be subject to the net investment income tax is: O A. Rental and royalty income O B. Tax-exempt interest O C. Wages O D. Self-employment income Submit Answers
Where can I find after tax interest income on a balance sheet or income statement(trying to find Economic Value added after-tax interest+net income-(cost of capital))? I have work that only shows interest expense before finding EBT. Do we use interest expense?
when multiplying companys tax rate with any firms accounting income , the result is always different with income tax expense . why ??
(1)Tax free income & tax credit income are same in income tax computation-Discuss with your own hypothetical example. (2)Non-assessable income does not increase tax liability, but tax-free income increases tax liability- Discuss with example.
Total comprehensive income is: Select one alternative: profit or loss after tax other comprehensive income after tax profit or loss after tax + other comprehensive income after tax None of the given answers are correct.
How is the sales tax rate usually determined? Does the company get to keep the sales tax as earned revenue?
The assumption made for the tax effect method of accounting for a company’s income tax is: Select one: A. an accounting balance sheet and a tax balance sheet are the same. B. income tax expense is equal to income tax payable. C. income tax expense is not equal to current tax liability. D. a tax balance sheet is prepared according to accounting standards.
Briefly explain the concepts of accounting profit, taxable profit, temporary difference, taxable temporarydifference, deductible temporary difference, deferred tax assets and deferred tax liability.ii Briefly explain the recognition criteria of deferred tax assets and deferred tax liability.iii What is your firm’s tax expense in its latest financial statements?iv Is this figure the same as the company tax rate times your firm’s accounting income? Explain why this is,or is not, the case for your firm highlighting the reasons for differences.v Identify the deferred tax assets/liabilities that is reported in the balance sheet articulating the possiblereasons why they have been recorded.vi Is there any current tax assets or income tax payable recorded by your company? Why is the income taxpayable not the same as income tax expense?vii Is the income tax expense shown in the income statement same as the income tax paid shown in the cashflow statement? If not, why is the difference?viii…