The statement of financial position of Mackay Ltd as at 30 June 2021 showed the following assets and liabilities. Assets Cash Inventories Accounts Receivables Allowance for Doubtful Debts Plant Accumulated Depreciation- Plant Deferred Tax Asset Liabilities Accounts Payable Provision for Long Service Leave Provision for Annual Leave Rent Received in Advance Deferred Tax Liability Additional information 2021 8 000 17 000 50 000 (5 500) 50 000 (26 000) ? 29 000 6 000 4 000 2 500 ? 2020 8 500 15 500 48 000 (4 000) 50 000 (21 000) 4 050 26 000 4 500 3 000 2 000 3 150 • Accumulated depreciation of plant for tax purposes was $39 000 at 30 June 2021. • The tax rate is 30%. Required: Prepare the deferred tax worksheet and journal entries to adjust deferred tax accounts.

The statement of financial position of Mackay Ltd as at 30 June 2021 showed the following assets and liabilities. Assets Cash Inventories Accounts Receivables Allowance for Doubtful Debts Plant Accumulated Depreciation- Plant Deferred Tax Asset Liabilities Accounts Payable Provision for Long Service Leave Provision for Annual Leave Rent Received in Advance Deferred Tax Liability Additional information 2021 8 000 17 000 50 000 (5 500) 50 000 (26 000) ? 29 000 6 000 4 000 2 500 ? 2020 8 500 15 500 48 000 (4 000) 50 000 (21 000) 4 050 26 000 4 500 3 000 2 000 3 150 • Accumulated depreciation of plant for tax purposes was $39 000 at 30 June 2021. • The tax rate is 30%. Required: Prepare the deferred tax worksheet and journal entries to adjust deferred tax accounts.

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...

See similar textbooks

Similar questions

The following information was extracted from the records of Jackson Ltd as at 30 June 2020.Asset (liability)Accounts receivableMotor vehiclesProvision for warrantyDeposits received in advanceCarrying amount$150 000165 000(12 000)(15 000)Tax base$175 000125 00000The depreciation rates for accounting and taxation are 15% p.a. and 25% p.a. respectively. Depositsare taxable when received, and warranty costs are deductible when paid. An allowance for doubtfuldebts of $25 000 has been raised against accounts receivable for accounting purposes, but such debtsare deductible only when written off as uncollectable.Required1. Calculate the temporary differences for Jackson Ltd as at 30 June 2020. Justify yourclassification of each difference as either a deductible temporary difference or a taxabletemporary difference.2. Prepare a deferred tax worksheet and the journal entry to record deferred tax for the yearended 30 June 2020 assuming no deferred items had been raised in prior years.
A company's trial balance at 31 December 2021 shows a debit balance of GHS700,000 on current tax and a credit balance of GHS8,400,000 on deferred The directors have estimated the provision for income tax for the year at GHS4.5m and the required deferred tax provision is GHS5.6m, GHS1.2m of which relates to a property revaluation. What is the profit or loss income tax charge for the year ended 31 December 2021?
x Company reports the following pretax income (loss) for both book and tax purposes. Year. Pretax income tax rate 2018 120,000 20% 2019 93,000 20% 2020. (82,000) 25% 2021 110,000 25% The tax rates listed were enacted by the beginning of 2018 Prepare the journal entries for years 2018-2021 to record income tax expense (benefit) and income taxes payable and the tax effects of the loss carryforward assuming that based on the weight of available evidence it is more likely than not that one half of the benefits of the loss carryforward will not be realized.
A company reports the following pretax income (loss) for both financial reporting purposes and tax purposes. Year Pretax Income (Loss) Tax Rate 2018 $142,000 17% 2019 94,000 17 2020 (208,800) 22 2021 318,500 22 In 2021, what amount of income tax payable should be reported for the company, assuming the loss can carry forward?
A company reports the following pretax income (loss) for both financial reporting purposes and tax purposes. Year Pretax Income (Loss) Tax Rate 2018 $183,000 17% 2019 69,000 17 2020 (206,800) 23 2021 385,100 23 Assuming that the company uses the carryforward provision, what is the amount of income or loss that will be reported for 2020? (Enter the amount only. DO NOT put a plus or minus sign in front of the amount.)
The following are the carrying amounts and tax bases for assets and liabilities of MNQ Company as December 31,2021. Carrying Amount Tax Base Cash 500,000 500,000 Trade and other receivables (net) 1,500,000 1,780,000 Property, plant and equipment (net) 4,500,000 2,800,000 Trade and other payables 2,000,000 2,000,000 Accrued warranty obligations 800,000 0 Any difference in carrying amount and tax basis is a temporary difference. Taxable income for 2021 is P1,800,000. The December 31, 2020 statement of financial position showed deferred tax asset of P300,000 ad deferred tax liability of P240,000. Income tax payments during the year 2021 amounted to P400,000, including P150,000 payment relating to 2020 taxable income. Any resulting deferred tax asset is fully realizable. Income tax rate is 30%. How much is the total income expense recorded for the year ended December 31, 2021?
Compute for the taxable income NINE Company reported a pre-tax financial income of P8,584,950 for the year ended December 31, 2021. The following items were also noted: Insurance premium on life of an officer with NINE Company as the beneficiary Tax depreciation Financial depreciation Penalties due to late filing of income tax returns Dividend received Estimated litigation loss accrued for financial accounting purposes deductible when settled in the future Estimated doubtful accounts expense Estimated tax payments Income tax rate Cash received for rent of which P486,280 will be recognized as income by the company on the next year 175,000 785,900 572,150 80,650 348,250 275,875 197,745 500,500 35% 589,125
A company reports the following pretax income (loss) for both financial reporting purposes and tax purposes. Year Pretax Income (Loss) Tax Rate 2018 $138,000 18% 2019 81,000 18 2020 (258,700) 21 2021 303,200 21 Assuming that the company can carryforward its 2020 net operating loss, what is the amount of deferred tax asset the company would report at the end of 2020 related to this loss carryforward?
Bestlook Company provided the following information for its first year of operatic December 31, 2019 in connection with the preparation of it income tax return: Accounting income Nondeductible expenses P8,000,000 400,000 600,000 Nontaxable revenue Deferred income on installment sales included in financial income but taxable in 2020 900,000 200,000 600,000 Doubtful accounts recorded Financial depreciation Tax depreciation Estimated warranty cost accrued in 2019 but not deductible for tax purposes until paid Income tax rate (current and future) a. How much is the current tax expense? 700,000 200,000 35% b. How much is the deferred tax asset? c. How much is the deferred tax liability? d. How much is the total tax expense?
A company reported in the income statement for the current year P900,000 income before provision for income tax. Please consider the following information: Rent income received in advance P150,000Interest income on time deposit 200,000Depreciation deducted for income tax purposes in excess of financial depreciation P100,000Income tax rate 30% 1. How much is the taxable income?A. 950,000B. 750,000C. 850,000D. 700,0002. How much is the accounting income subject to tax?A. 900,000B. 750,000C. 700,000D. 225,000Thank you.
PROBLEM 1 Xavier Company provided the following information for its first year of operations ended December 31, 2021 in connection with the preparation of its income tax return:Taxable income P 4,000,000Non-deductible expenses 200,000Non-taxable revenue 300,000Deferred income on installment saleincluded in financial income but taxable in 2022 450,000Doubtful accounts recorded 100,000Financial depreciation 300,000Tax depreciation 350,000Estimated warranty cost accrued in2021 but not deductible for tax purposes until paid…
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.