UMPI’s end of year pretax financial income for 2018 was $720,000. Included in it was $40,000 in interest income on municipal bonds, warranty expense accrued for $15,000, a $25,000 fine for dumping hazardous waste, and depreciation of $40,000. Depreciation for tax purposes was $65,000. Their tax rate was 21%. Format the income tax expense section of the income statement, starting with “income before income taxes”.

UMPI’s end of year pretax financial income for 2018 was $720,000. Included in it was $40,000 in interest income on municipal bonds, warranty expense accrued for $15,000, a $25,000 fine for dumping hazardous waste, and depreciation of $40,000. Depreciation for tax purposes was $65,000. Their tax rate was 21%. Format the income tax expense section of the income statement, starting with “income before income taxes”.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter6: Deductions And Losses: In General

Section: Chapter Questions

Problem 56P

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Consider the following accounts and determine if the account is a current liability, a noncurrent liability, or neither. A. cash B. federal income tax payable this year C. long-term note payable D. current portion of a long-term note payable E. note payable due in four years F. interest expense G. state income tax
For the year ended December 31, 2018, Fidelity Engineering reported pretax accounting income of $977,000.Selected information for 2018 from Fidelity’s records follows:Interest income on municipal bonds $32,000Depreciation claimed on the 2018 tax return in excess of depreciation on the income statement 55,000Carrying amount of depreciable assets in excess of their tax basis at year-end 85,000Warranty expense reported on the income statement 26,000Actual warranty expenditures in 2018 16,000Fidelity’s income tax rate is 40%. At January 1, 2018, Fidelity’s records indicated balances of zero and $12,000in its deferred tax asset and deferred tax liability accounts, respectively.Required:1. Determine the amounts necessary to record income taxes for 2018, and prepare the appropriate journal entry.2. What is Fidelity’s 2018 net income?
UMPI’s end of year pretax financial income for 2018 was $720,000. Included in it was $40,000 in interest income on municipal bonds, warranty expense accrued for $15,000, a $25,000 fine for dumping hazardous waste, and depreciation of $40,000. Depreciation for tax purposes was $65,000. Their tax rate was 21%. Instructions: 10.1 Compute the taxable income for 2018. 10.2 Compute the deferred taxes at December 31, 2018 that relate to the temporary differences described above. 10.3 Prepare the journal entries to record income tax expense, deferred taxes, and income taxes payable for 2018. 10.4 Format the income tax expense section of the income statement, starting with “income before income taxes”.
The end-of-year pretax financial income for UMPI in 2018 was $720,000. It included $40,000 in municipal bond interest income, $15,000 in warranty expenditure, a $25,000 fine for dumping hazardous waste, and $40,000 in depreciation. Tax-deductible depreciation was $65,000. The taxation in their country was 21%. Beginning with "income before income taxes," format the income tax expense part of the net income.
For the year ended December 31, 2021, Fidelity Engineering reported pretax accounting income of $1,008,000. Selected information for 2021 from Fidelity’s records follows: Interest income on municipal governmental bonds $ 64,000 Depreciation claimed on the 2021 tax return in excessof depreciation on the income statement 88,000 Carrying amount of depreciable assets in excessof their tax basis at year-end 152,000 Warranty expense reported on the income statement 42,000 Actual warranty expenditures in 2021 32,000 Fidelity's income tax rate is 25%. At January 1, 2021, Fidelity's records indicated balances of zero and $16,000 in its deferred tax asset and deferred tax liability accounts, respectively. Required:1. Determine the amounts necessary to record income taxes for 2021, and prepare the appropriate journal entry.2. What is Fidelity’s 2021 net income?
For the year ended December 31, 2021, Fidelity Engineering reported pretax accounting Income of $992,000. Selected Information for 2021 from Fidelity's records follows: Interest income on municipal governmental bonds Depreciation claimed on the 2021 tax return in excess of depreciation on the income statement Carrying amount of depreciable assets in excess of their tax basis at year-end Warranty expense reported on the income statement Actual warranty expenditures in 2021 Fidelity's Income tax rate is 25%. At January 1, 2021, Fidelity's records indicated balances of zero and $12,000 in Its deferred tax asset and deferred tax liability accounts, respectively. Required: 1. Determine the amounts necessary to record income taxes for 2021, and prepare the appropriate journal entry. 2. What is Fidelity's 2021 net income? Complete this question by entering your answers in the tabs below. Required 1 Calculation Required 1 GJ Required 2 Pretax accounting income Permanent difference Determine…
For the year ended December 31, 2024, Fidelity Engineering reported pretax accounting income of $988,000. Selected information for 2024 from Fidelity's records follows: Interest income on municipal governmental bonds $ 44,000 Depreciation claimed on the 2024 tax return in excess of depreciation on the income statement Carrying amount of depreciable assets in excess of their tax basis at year-end Warranty expense reported on the income statement 68,000 112,000 32,000 Actual warranty expenditures in 2024 22,000 Fidelity's income tax rate is 25%. At January 1, 2024, Fidelity's records indicated balances of zero and $11,000 in its deferred tax asset and deferred tax liability accounts, respectively. Required: Determine the amounts necessary to record income taxes for 2024, and prepare the appropriate journal entry. What is Fidelity's 2024 net income?
The following information was taken from the accounting records of Lancer Inc, for the year ending 2020. Pretax accounting income $ 1,500,000 Interest Revenue on Municipal bonds 100,000 Litigation expense 2, 000,000 Excess Depreciation for tax purposes 1, 300,000 Deferred revenue 200,000 The tax rate for 2020 is 40% The total taxable income computed by Lancer for 2020 should be : A) $2,300,000 B) $4.900,000 C) $ 900,000 D) $3,700,000
The following information is available for Marigold Corporation for 2020. 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $124,000. This difference will reverse in equal amounts of $31,000 over the years 2021–2024. 2. Interest received on municipal bonds was $9,300. 3. Rent collected in advance on January 1, 2020, totaled $64,200 for a 3-year period. Of this amount, $42,800 was reported as unearned at December 31, 2020, for book purposes. 4. The tax rates are 40% for 2020 and 35% for 2021 and subsequent years. 5. Income taxes of $297,000 are due per the tax return for 2020. 6. No deferred taxes existed at the beginning of 2020. Taxable income in 2020 = 742,500 Pretax financial income for 2020 = 833,000 Prepare the income tax expense section of the income statement for 2020, beginning with “Income before income taxes. picture below:
The following information is available for Marigold Corporation for 2020. 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $124,000. This difference will reverse in equal amounts of $31,000 over the years 2021–2024. 2. Interest received on municipal bonds was $9,300. 3. Rent collected in advance on January 1, 2020, totaled $64,200 for a 3-year period. Of this amount, $42,800 was reported as unearned at December 31, 2020, for book purposes. 4. The tax rates are 40% for 2020 and 35% for 2021 and subsequent years. 5. Income taxes of $297,000 are due per the tax return for 2020. 6. No deferred taxes existed at the beginning of 2020. Compute taxable income for 2020. Taxable income for 2020 Compute pretax financial income for 2020. Pretax financial income for 2020 Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2020 and 2021. Assume…
The following information is available for Remmers Corporation for 2020. 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $120,000. This difference will reverse in equal amounts of $30,000 over the years 2021–2024. 2. Interest received on municipal bonds was $10,000. 3. Rent collected in advance on January 1, 2020, totaled $60,000 for a 3-year period. Of this amount, $40,000 was reported as unearned at December 31, 2020, for book purposes. 4. The tax rates are 20% for 2020 and 17% for 2021 and subsequent years. 5. Income taxes of $160,000 are due per the tax return for 2020. 6. No deferred taxes existed at the beginning of 2020. Instructions a. Compute taxable income for 2020. b. Compute pretax financial income for 2020. c. Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2020 and 2021. Assume taxable income was $480,000 in 2021. d. Prepare the…
The following information is available for Marigold Corporation for 2020. 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $124,000. This difference will reverse in equal amounts of $31,000 over the years 2021–2024. 2. Interest received on municipal bonds was $10,100. 3. Rent collected in advance on January 1, 2020, totaled $56,700 for a 3-year period. Of this amount, $37,800 was reported as unearned at December 31, 2020, for book purposes. 4. The tax rates are 40% for 2020 and 35% for 2021 and subsequent years. 5. Income taxes of $308,000 are due per the tax return for 2020. 6. No deferred taxes existed at the beginning of 2020.