Sunland Services Ltd. follows ASPE and had earned accounting income before taxes of $520,000 for the year ended December 31,2023.During 2023, Sunland paid $77,000 for meals and entertainment expenses.In 2020, Sunland's tax accountant made a mistake when preparing the company's income tax return. In 2023, Sunland paid $10,500 inpenalties related to this error. These penalties were not deductible for tax purposes.Sunland owned a warehouse building for which it had no current use, so the company chose to use the building as a rental property. Atthe beginning of 2023, Sunland rented the building to Trung Inc. for two years at $64,500 per year. Trung paid the entire two years'rent in advance.Sunland used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $286,200. For taxpurposes, Sunland claimed the maximum capital cost allowance of $431,400. This asset had been purchased at the beginning of theyear for $3,004,400.In 2023, Sunland began selling its products with a two-year warranty against manufacturing defects. In 2023, Sunland accrued$306,100 of warranty expenses: actual expenditures for 2023 were $88,200 with the remaining $217,900 anticipated in 2024.In 2023, Sunland was subject to a 25% income tax rate. During the year, the federal government announced that tax rates would bedecreased to 23% for all future years beginning January 1, 2024.(a)Your answer is incorrect.Calculate the amount of any permanent differences for 2023.Permanent differences $eTextbook and MediaList of Accounts

Permanent differences are differences between taxable income and accounting income that will not…

Answered: Calculate the amount of any permanent…

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Calculate the amount of any permanent differences for 2023.

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...

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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)
Cheyenne Services Ltd. follows ASPE and had earned accounting income before taxes of $493,000 for the year ended December 31 2020. During 2020, Cheyenne paid $82,000 for meals and entertainment expenses. In 2017, Cheyenne's tax accountant made a mistake when preparing the company's income tax return. In 2020, Cheyenne paid $10,400 in penalties related to this error. These penalties were not deductible for tax purposes. Cheyenne owned a warehouse building for which it had no current use, so the company chose to use the building as a rental property. At the beginning of 2020, Cheyenne rented the building to Trung Inc. for two years at $62,700 per year. Trung paid the entire two years' rent in advance. Cheyenne used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $303,500. For tax purposes, Cheyenne claimed the maximum capital cost allowance of $453,900. This asset had been purchased at the beginning of the year for $3,024,000. In 2020,…
Splish Inc. incurred a net operating loss of $515,000 in 2025. The tax rate for all years is 20%. Prepare the journal entries to record the benefits of the loss carryforward. Splish expects to return to profitability in 2026. (List debit entry before credit entry. Credit account titles are automatically indented when 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) Account Titles and Explanation Debit Credit
Sunland Services Ltd. follows ASPE and had earned accounting income before taxes of $520,000 for the year ended December 31, 2023. During 2023, Sunland paid $77,000 for meals and entertainment expenses. In 2020, Sunland's tax accountant made a mistake when preparing the company's income tax return. In 2023, Sunland paid $10,500 in penalties related to this error. These penalties were not deductible for tax purposes. Sunland owned a warehouse building for which it had no current use, so the company chose to use the building as a rental property. At the beginning of 2023, Sunland rented the building to Trung Inc. for two years at $64,500 per year. Trung paid the entire two years' rent in advance. Sunland used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $286,200. For tax purposes, Sunland claimed the maximum capital cost allowance of $431,400. This asset had been purchased at the beginning of the year for $3,004,400. In 2023, Sunland…
Flint Enterprises Ltd., a private company following ASPE earned accounting income before taxes of $1,712,000 for the year ended December 31, 2020. During 2020, Flint paid $240,000 for meals and entertainment expenses. In 2017, Flint’s tax accountant made a mistake when preparing the company’s income tax return. In 2020, Flint paid $17,000 in penalties related to this error. These penalties were not deductible for tax purposes. Flint owned a warehouse building for which it had no current use, so the company chose to use the building as a rental property. At the beginning of 2020, Flint rented the building to SPK Inc. for two years at $260,000 per year. SPK paid the entire two years’ rent in advance. Flint used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $396,000. For tax purposes, Flint claimed the maximum capital cost allowance of $621,000. Flint began to sell its products with a two-year warranty against manufacturing…
In December of 2019, a company received consulting services of $100,000. No entry was recorded for these service in 2019. The invoice for the services was received in January 2020 and recorded by debiting consulting expense and crediting accounts payable. This error was discovered in 2020 and was determined to be a material error. What is the impact of the error on the net income of 2019 and 2020? Provide the proper correcting journal enntry assuming a 30% tax rate.
Bridgeport Inc. incurred a net operating loss of $477,000 in 2020. The tax rate for all years is 20%. Prepare the journal entries to record the benefits of the loss carryforward. Bridgeport expects to return to profitability in 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount
Carla Inc. incurred a net operating loss of $531,000 in 2025. The tax rate for all years is 30%. Prepare the journal entries to record the benefits of the loss carryforward. Carla expects to return to profitability in 2026. (List debit entry before credit entry. Credit account titles are automatically indented when 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.)
Rich Goma Corporation failed to file its income tax return for the fiscal year ending August 31, 2021. On June 6, 2022, it filed an income tax return with a basic tax still due and payable for the fiscal year amounting to P500,000. Compute the interest penalty to be imposed by the BIR. P28,603 P45,873 P28,438 P46,207
Pearl Inc. incurred a net operating loss of $455,000 in 2020. The tax rate for all years is 20%. Assume that it is more likely than not that the entire net operating loss carryforward will not be realized in future years. Prepare all the journal entries necessary at the end of 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
A company's income statement reported net income of $88,500 during 2019. The income tax return excluded a revenue item of $9,500 (reported on the income statement) because under the tax laws the $9,500 would not be reported for tax purposes until 2020. Which of the following statements is incorrect assuming a 21% tax rate? 1. Income tax expense on the income statement is $16,590. 2. A $1,995 deferred tax liability is reported as of December 31, 2019. 3. The $9,500 of revenue creates a deferred tax liability. 4. Income tax expense on the income statement exceeds the tax liability to the IRS.
Bridgeton Company started its operations at the beginning of 2018. The following information relates to its operations for the year. The differences between the 2018 income statement and tax return are listed below: 1. Fines incurred for pollution violations of $7,320 were deducted in computing pretax financial income.2. Warranty expense accrued for financial reporting purposes amounts to $15,910.Warranty deductions per the tax return amount to $8,730.3. Interest revenue earned on an investment in tax-exempt bonds amounts to $2,570.4. Depreciation of property, plant and equipment for financial reporting purposes amounts to $80,500. Depreciation of these assets amounts to $102,000 for the tax return.5. Income on construction contracts using the percentage of completion method per books amounts to $99,000. Income on contracts for tax purposes amounts to $64,300.6. Sales on an accrual basis were $76,890. For tax purposes $60,450 was recorded on the installment sales method.7. Interest…