Complete the following statements by filling in the blanks. aIn a period in which a taxable temporary difference reverses, the reversal will cause taxable income to bel greater thanpretax financial income.bIf a $76,200 balance in Deferred Tax Asset was computed by use of a 40% rate, the underlying cumulative temporary difference amounts to$are notDeferred taxesrecorded to account for permanent differences.dless thanIf a taxable temporary difference originates in 2020, it will cause taxable income for 2020 to bepretax financial income for 2020.If total tax expense is $51,700 and deferred tax expense is $67,200, then the current portion of the expense computation is referred to as currentbenefittaxof $fIf a corporation's tax return shows taxable income of $96,300 for Year 2 and a tax rate of 40%, how much will appear on the December 31, Year 2,balance sheet for "Income taxes payable" if the company has made estimated tax payments of $35,400 for Year 2? $gdebitAn increase in the Deferred Tax Liability account on the balance sheet is recorded by ato the Income Tax Expense account.hAn income statement that reports current tax expense of $80,000 and deferred tax benefit of $22,000 will report total income tax expense ofmore likely than notA valuation account is needed whenever it is judged to bethat a portion of a deferred tax assetrealized.jIf the tax return shows total taxes due for the period of $75,600 but the income statement shows total income tax expense of $57,100, the difference ofbenefit$18,500 is referred to as deferred tax

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a In a period in which a taxable temporary difference reverses, the reversal will cause taxable income to bel greater than pretax financial income. b If a $76,200 balance in Deferred Tax Asset was computed by use of a 40% rate, the underlying cumulative temporary difference amounts to are not Deferred taxes | recorded to account for permanent differences.

a In a period in which a taxable temporary difference reverses, the reversal will cause taxable income to bel greater than pretax financial income. b If a $76,200 balance in Deferred Tax Asset was computed by use of a 40% rate, the underlying cumulative temporary difference amounts to are not Deferred taxes | recorded to account for permanent differences.

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 4P: Interperiod Tax Allocation Klerk Company had four temporary differences between its pretax financial...

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Incomc Taxes Then Company has been in operation for several years. It has both a deductible and a taxable temporary difference. At the beginning of 2019, its deferred tax asset was 690, and its deferred tax liability was 750. The company expects its lutine deductible amount to be deductible in 2020 and its Inline taxable amount to 1 taxable in 2021. In 2018, Congress enacted income tax rates for future years as follows: 2019, 30%; 2020, 34%; and 2021, 35%. At the end of 2019, Then reported income taxes payable of 25,800, an increase in its deferred tax liability of 300, and an ending balance in its deferred tax asset of 860. Thun has prepared the following schedule of items related to its income taxes for 2019. Required: Fill in the blanks in the preceding schedule. Show your calculations.
Definitions The FASB has defined several terms in regard to accounting for income taxes. Below are various code letters (for terms) followed by definitions. 1. The deferred tax consequences of future deductible amounts and operating loss carryforwards 2. A difference between the tax basis of an asset or liability and its reported amount in the financial statements that will result in taxable or deductible amounts in future years when the reported amount of the asset or liability is recovered or settled, respectively 3. Temporary difference that results in taxable amounts in future years when the related asset or liability is recovered or settled, respectively 4. The future effects on income taxes, as measured by the applicable enacted tax rate and provisions of the enacted tax low, resulting from temporary differences and operating loss carryforwards at the end of the current year 5. The change during the year in a corporations deferred tax liabilities and assets 6. The deferred tax consequences of future taxable amounts 7. The portion of o deferred tax asset for which it is more likely than not that a tax benefit will not be realized 8. Temporary difference that results in deductible amounts in future years when the related asset or liability is recovered or settled, respectively 9. The sum of income tax payable and deferred tax expense (or benefit) 10. The amount of income taxes paid or payable (or refundable) for the current year 11. An excess of tax deductible expenses over taxable revenues in a year that may be carried forward to reduce taxable income in a future year 12. The excess of taxable revenues over tax deductible expenses and exemptions for the year 13. Income tax expense divided by income before income taxes
Interperiod Tax Allocation Klerk Company had four temporary differences between its pretax financial income and its taxable income during 2019 as follows: At the beginning of 2019, Klerk had a deferred tax liability of 84,300 related to Temporary Difference #2 and a deferred tax asset of 21,090 related to Temporary Difference #4. Based on its tax records, Klerk earned taxable income of 270,000 for 2019. Kerks accountant has prepared the following schedule showing the total future taxable and deductible amounts at the end of 2019 for its four temporary differences: The company has a history of earning income and expects to be profitable in the future. The income tax rate for 2019 is 40%, but in 2018 Congress enacted a 30% tax rate for 2020 and future years. During 2019, for financial accounting purposes, Klerk reported revenues of 750,000 and expenses of 447,100. The deferred taxes related to Temporary Differences #1, #2, and #4 are considered to be noncurrent by the company; the deferred tax related to Temporary Difference #3 is considered to be current. Required: 1. Prepare Klerks income tax journal entry for 2019. 2. Prepare a condensed 2019 income statement for Klerk. 3. Show how the income tax items are reported on Klerks December 31, 2019, balance sheet.
Multiple Temporary Differences Vickers Company reports taxable income of 4,500 for 2019. Vickers has two temporary differences between pretax financial income and taxable income at the end of 2019. The first difference is expected to result in taxable amounts totaling 2,470 in future years. The second difference is expected to result in deductible amounts totaling 1,360 in future years. Vickers has a deferred tax asset of 372 and a deferred tax liability of 690 at the beginning of 2019. The current tax rate is 30%, and no change in the tax rate has been enacted for future years. Vickers has positive, verifiable evidence of future taxable income. Required: Prepare Vickerss income tax journal entry at the end of 2019.
Save & Exit Subm Two independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences: SITUATION Taxable income Amounts at year-end: Future deductible amounts 2. $46,000 $86,000 5,600 10,600 0 5,600 Future taxable amounts Balances at beginning of year, dr (cr): Deferred tax asset, Deferred tax liability $ 1,000 $ 3,180 0 1,000 The enacted tax rate is 30% for both situations. Required: For each situation determine the: SITUATION 2. (a.) Income tax payable currently. (b.) Deferred tax asset - balance at year-end. (c.) Deferred tax asset change dr or (cr) for the year. (d.) Deferred tax liability - balance at year-end. (e.) Deferred tax liability change dr or (cr) for the year. (f.) Income tax expense for the year. Next > 31 of 39
Complete the following statements by filling in the blanks. A. In a period in which a taxable temporary difference reverses, the reversal will cause taxable income to be ____________ pretax financial income. (less than / greater than). B. If a $76,400 balance in Deferred Tax Asset was computed by use of a 40% rate, the underlying cumulative temporary difference amounts to $_________ . C. Deferred taxes __________ recorded to account for permanent differences. (are / are not) D. If a taxable temporary difference originates in 2020, it will cause taxable income for 2020 to be ______________ pretax financial income for 2020. (less than / greater than) E. If total tax expense is $52,200 and deferred tax expense is $67,300, then the current portion of the expense computation is referred to as current tax ______________ of $_____________ . (expense / benefit) F. If a corporation’s tax return shows taxable income of $98,000 for Year 2 and a tax rate of 40%, how much will appear on the…
1. Deferred tax liability, January 1, 2022, $0. 2. Deferred tax asset, January 1, 2022, $0. 3. Pretax financial income for 2022, $345,000. 4. Cumulative temporary difference at December 31, 2022, giving rise to future taxable amounts, $205,500. 5. Cumulative temporary difference at December 31, 2022, giving rise to future deductible amounts, $64,800. 6. Tax rate for all years, 20%. 7. The company is expected to operate profitably in the future. Determine the income taxes payable for 2022.
Two independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences: SITUATION 1 2 Taxable income $ 48,000 $ 88,000 Amounts at year-end: Future deductible amounts 5,800 10,800 Future taxable amounts 0 5,800 Balances at beginning of year, dr (cr): Deferred tax asset $ 1,000 $ 3,240 Deferred tax liability 0 1,000 The enacted tax rate is 30% for both situations. Required:For each situation determine the: Situation 1 and 2 a. income tax payable currently b. deferred tax asset - balance at year-end c. deferred tax asset change dr or cr for the year d. deferred tax liability - balance at year-end e. deferred tax liability change dr or cr for the year f. income tax expense for the year.
Two independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences: SITUATION Taxable income Amounts at year-end: Future deductible amounts Future taxable amounts Balances at beginning of year: Deferred tax asset Deferred tax liability 1 2 $100,000 $130,000 0 10,000 0 2,000 The enacted tax rate is 25% for both situations. 10,000 15,000 $2,000 0 Required: For each situation determine the: (a.) Income tax payable currently. (b.) Deferred tax asset - balance at year-end. (c.) Deferred tax asset change dr or (cr) for the year. (d.) Deferred tax liability - balance at year-end. (e.) Deferred tax liability change dr or (cr) for the year. (f.) Income tax expense for the year.
(Terminology, Relationships, Computations, Entries)InstructionsComplete the following statements by filling in the blanks.(a) In a period in which a taxable temporary difference reverses, the reversal will cause taxable income to be _______ (less than, greater than) pretax financial income.(b) If a $76,000 balance in Deferred Tax Asset was computed by use of a 40% rate, the underlying cumulative temporary difference amounts to $_______.(c) Deferred taxes ________ (are, are not) recorded to account for permanent differences.(d) If a taxable temporary difference originates in 2017, it will cause taxable income for 2017 to be ________ (less than, greater than) pretax financial income for 2017.(e) If total tax expense is $50,000 and deferred tax expense is $65,000, then the current portion of the expense computation is referred to as current tax _______ (expense, benefit) of $_______.(f) If a corporation’s tax return shows taxable income of $100,000 for Year 2 and a tax rate of 40%, how…
Le Bron Corporation has the following information for 2021 taxable year: Quarter RCIT MCIT CWT First P200,000 P160,000 P40,000 Second 240,000 500,000 60,000 Third 500,000 150,000 80,000 Fourth 300,000 200,000 70,000 Additional information: Excess MCIT from 2020: P60,000 Excess tax credits from 2020: P20,000 1.) How much was the income tax payable for the first quarter? a. 200,000 b. 160,000 c. 120,000 d. 80,000 2.) How much was the income tax payable for the second quarter? a. 660,000 b. 460,000 c. 200,000 d. 160,000 3.) How much was the annual income tax payable? a. 1,260,000 b. 390,000 c. 230,000 d. 930,000
39 Two independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences: SITUATION Taxable income Amounts at year-end: Future deductible amounts Future taxable amounts Balances at beginning of year, debit (credit): Deferred tax asset Deferred tax liability The enacted tax rate is 40% for both situations. Required: For each situation determine the following: (a) Income tax payable currently. (b) Deferred tax asset - balance at year-end. (c) Deferred tax asset change debit or (credit) for the year. (d) Deferred tax liability - balance at year-end. (e) Deferred tax liability change debit or (credit) for the year. (f) Income tax expense for the year. 1 2 $ 39,000 $ 79,000 4,900 0 11,100 4,900 $ 1,000 0 $ 4,440 1,000 SITUATION 2