Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 18, Problem 21E
Uncertain Tax Position At the end of the current year, Boyd Company claims a $200,000 tax credit on its income tax return. Boyd is uncertain whether the IRS will accept this credit. It studies the IRS regulations and determines that it is more likely than not that the IRS will accept all or some of this tax credit. Based on this research, Boyd estimates the following probability distribution of possible outcomes:
Required:
For the current year, determine (1) the amount that Boyd will recognize as a current tax benefit and (2) the amount that it will record as the unrecognized tax benefit.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Choose the correct. Niceville Company pays property taxes of $100,000 in the second quarter of the year. Which of the following statements is true with respect to the recognition of property tax expense in interim financial statements?a. Under U.S. GAAP, the company would report property tax expense of $100,000 in the second quarter of the year.b. Under IFRS, the company would report property tax expense of $100,000 in the second quarter of the year.c. Under U.S. GAAP, the company would report property tax expense of $33,333 in each of the second, third, and fourth quarters of the year.d. Under IFRS, the company would report property tax expense of $25,000 in the first quarter of the year.
Matador Company is preparing its 2022 financial statements. Matador's bookkeeper has
determined Income from Continuing Operations (ICO) but is not certain this number is
accurate. Matador has a corporate tax rate of 30%.
Use the following information to determine the adjustments, if any, to ICO.
(Hint: if you are adjusting ICO, should the adjustments be pre-tax or net of tax?)
If you need to increase ICO, enter your answer as a positive number; for instance: 3000
If you need to decrease ICO, enter your answer as a negative number; for instance: -3000
If you determine no change is needed to ICO; enter 0.
Put your answers in the provided boxes.
1) During 2022, Matador declared preferred dividends of $70,000, paid $90,000 for
dividends, and received $135,000 for dividends on available-for-sale equity securities.
The bookkeeper did not include any of these when calculating ICO. Determine the
adjustment to ICO. Matador has a corporate tax rate of 30%.
2) Over the past 4 years, Matador has…
Select the best answer to the tax credit and corporate and partnership income tax issues.
Mamey, Inc. had taxable income of $138,500 in 2020. What is the income tax expense for the year 2020?
a. $29,085
b. $25,623
c. $34,625
d. $27,700
Which of the following items might not generally appear on the Schedule M-1 reconciliation
a. Exempt interest income
b. Meal expenses
c. Office material expenses
d. Federal income tax expense
Cubey Industries, Inc. has a net book income of $76,100. For the year it had an income tax expense of $18,900. During the year Cubey received pandemic exempt income of $5,000 and had total food expense of $1,000 on books. What is the result of the Schedule M-1 reconciliation per Schedule line 10.
a. $81,600
b. $90,500
c. $95,500
d. $95,000
The net operating losses (NOLs) that a corporation has available to be used against taxable income for the year 2020 are subject to
a. A limitation of 90% of taxable income
b.…
Chapter 18 Solutions
Intermediate Accounting: Reporting And Analysis
Ch. 18 - What source is used to determine income tax...Ch. 18 - Prob. 2GICh. 18 - Prob. 3GICh. 18 - Prob. 4GICh. 18 - Prob. 5GICh. 18 - Prob. 6GICh. 18 - What are the three characteristics of a liability,...Ch. 18 - Prob. 8GICh. 18 - When does a corporation establish a valuation...Ch. 18 - List the steps necessary to measure and record a...
Ch. 18 - Prob. 11GICh. 18 - Prob. 12GICh. 18 - Prob. 13GICh. 18 - Prob. 14GICh. 18 - Prob. 15GICh. 18 - Describe an operating loss carryforward. List the...Ch. 18 - Prob. 17GICh. 18 - Prob. 18GICh. 18 - Prob. 19GICh. 18 - Prob. 20GICh. 18 - Prob. 21GICh. 18 - Prob. 22GICh. 18 - Prob. 23GICh. 18 - Which of the following is not a cause of a...Ch. 18 - Which of the following is an argument in favor of...Ch. 18 - Prob. 3MCCh. 18 - Prior to and during 2019, Shadrach Company...Ch. 18 - At the beginning of 2019, Conley Company purchased...Ch. 18 - Oliver Company earned taxable income of 7,500...Ch. 18 - Prob. 7MCCh. 18 - Prob. 8MCCh. 18 - Brooks Company reported a prior period adjustment...Ch. 18 - Which component of current income is not disclosed...Ch. 18 - Parker Company identifies depreciation as the only...Ch. 18 - Refer to RE18-1. Assume that Parkers taxable...Ch. 18 - In the current year, Madison Corporation had...Ch. 18 - Refer to RE18-3. Prepare the additional journal...Ch. 18 - Turnip Company purchased an asset at a cost of...Ch. 18 - Prob. 6RECh. 18 - Compute Radish Companys taxable income given the...Ch. 18 - Sky Company reports a pretax operating loss of...Ch. 18 - Prob. 9RECh. 18 - Kline Company has the following items of pretax...Ch. 18 - Barth James Inc. has the following deferred tax...Ch. 18 - Cole Company had a deferred tax liability of 1,000...Ch. 18 - Future Taxable Amount Arrow Company began...Ch. 18 - Change in Tax Rates At the end of 2019, Sentry...Ch. 18 - Temporary Difference At the end of 2019, its first...Ch. 18 - Single Temporary Difference: Multiple Rates At the...Ch. 18 - Prob. 5ECh. 18 - Valuation Account At the end of 2019, its first...Ch. 18 - Deferred Tax Asset and Valuation Account Zeta...Ch. 18 - Incomc Taxes Then Company has been in operation...Ch. 18 - Prob. 9ECh. 18 - Multiple Temporary Differences Vickers Company...Ch. 18 - Multiple Tax Rates For the year ended December 31,...Ch. 18 - Temporary and Permanent Differences Lin has just...Ch. 18 - Temporary and Permanent Differences Assume the...Ch. 18 - Operating Loss At the end of 2019, Keil Company...Ch. 18 - Operating Loss At the end of 2019, its first year...Ch. 18 - Operating Loss Baxter Company began operations in...Ch. 18 - Intraperiod Tax Allocation Wright Company reports...Ch. 18 - Prob. 18ECh. 18 - Prob. 19ECh. 18 - Balance Sheet Presentation Thiel Company reports...Ch. 18 - Uncertain Tax Position At the end of the current...Ch. 18 - Definitions The FASB has defined several terms in...Ch. 18 - Temporary and Permanent Differences In the current...Ch. 18 - Multiple Temporary Differences Wilcox Company has...Ch. 18 - Interperiod Tax Allocation Klerk Company had four...Ch. 18 - Prob. 5PCh. 18 - Interperiod Tax Allocation Quick Company reports...Ch. 18 - Deferred Tax Liability: Depreciation At the...Ch. 18 - Deferred Tax Liability: Depreciation Gire Company...Ch. 18 - Interperiod Tax Allocation Peterson Company has...Ch. 18 - Operating Loss Ross Company has been in business...Ch. 18 - Prob. 11PCh. 18 - Comprehensive Colt Company reports pretax...Ch. 18 - Prob. 13PCh. 18 - Comprehensive Jayryan Company sells products in a...Ch. 18 - Prob. 1CCh. 18 - Prob. 2CCh. 18 - Prob. 3CCh. 18 - Interperiod and Intraperiod Tax Allocation Income...Ch. 18 - Prob. 5CCh. 18 - Intel-period Tax Allocation Chris Green, CPA, is...Ch. 18 - Prob. 7CCh. 18 - Analyzing Coca-Colas Income Tax Disclosures Obtain...Ch. 18 - Prob. 9C
Additional Business Textbook Solutions
Find more solutions based on key concepts
List five asset accounts, three liability accounts, and five expense accounts included in the acquisition and p...
Auditing And Assurance Services
How would the decision to dispose of a segment of operations using a split-off rather than a spin-off impact th...
Advanced Financial Accounting
Place the letter of the appropriate accounting cost in Column 2 in the blank next to each decision category in ...
Fundamentals of Cost Accounting
Bank loan; accrued interest LO132 On October 1, Eder Fabrication borrowed 60 million and issued a nine-month, ...
INTERMEDIATE ACCOUNTING
Calculate profit margin on sales ratio. (LO 5). Suppose a firm had sales of $200,000 and net income of $7,000 f...
Financial Accounting
Analysis of inventory errors A2 Hallam Company’s financial statements show the following. The company recently ...
FINANCIAL ACCT.FUND.(LOOSELEAF)
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
- How do the all events and economic performance requirements apply to the following transactions by an accrual basis taxpayer? a. The company guarantees its products for six months. At the end of 2019, customers had made valid claims for 600,000 that were not paid until 2020. Also, the company estimates that another 400,000 in claims from 2019 sales will be filed and paid in 2020. b. The accrual basis taxpayer reported 200,000 in corporate taxable income for 2019. The state income tax rate was 6%. The corporation paid 7,000 in estimated state income taxes in 2019 and paid 2,000 on 2018 state income taxes when it filed its 2018 state income tax return in March 2019. The company filed its 2019 state income tax return in March 2020 and paid the remaining 5,000 of its 2019 state income tax liability. c. An employee was involved in an accident while making a sales call. The company paid the injured victim 15,000 in 2019 and agreed to pay the victim 15,000 a year for the next nine years.arrow_forwardAs a tax consultant you receive on continuous basis inquiries and tax forms from your clients. Following are independent inquires that you have to check and reply back to your clients. For each enquiry below, Comment on whether the given calculations are correct or not by providing the necessary calculations. a-Government A decided to increase the income tax rate from 12% to 16% in year 2021. The total tax base for the year 2020 is $4,200,000. The government is expecting to collect $169,000 additional revenue in year 2021. Quarter of the individual taxpayers decided to quit. The government collected $ 169,000 additional tax revenue.arrow_forwardSpamela Hamderson Inc. reports the following pretax income (loss) for both financial reporting purposes and tax purposes. Year Pretax Income(Loss) Tax Rate 2018 $120,000 17 % 2019 90,000 17 % 2020 (280,000) 19 % 2021 300,000 19 % The tax rates listed were all enacted by the beginning of 2018. Assuming that based on the weight of available evidence, it is more likely than not that one-fourth of the benefits of the loss carryforward will not be realized, prepare the income tax section of the 2020 income statement, beginning with the line “Operating loss before income taxes.” (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)arrow_forward
- As of December 31, 2024, Duffy Company believed it was probable that an unfavorable outcome would result from a dispute with the Massachusetts State tax authorities. In-house tax experts estimated that Duffy would owe between $2113 - $4362 of additional taxes, with $3369 being the most likely amount. What is the journal entry, if any, that Duffy should record to reflect this in the 2024 financial statements? a. A journal entry is not booked since this is a gain contingency. b. Debit to Contingent Loss for $3369; Credit to Contingent Liability for $3369 c. Debit to Contingent Loss for $2113; Credit to Contingent Liability for $2113 d. Debit to Contingent Liability for $4362; Credit to Contingent Loss for $4362arrow_forwardNow assume that Syer does account for its NOL under the CARES Act. Prepare the appropriate journal entry to record Syer’s 2020 income taxes, and indicate Syer’s 2020 net income(loss). Syer Company reports net operating income (loss) for financial reporting and tax purposes in each year as follows ($ in millions): 2016 2017 2018 2019 2020 $ 330) $ 130 $ 0 $0 $ (660) Syer’s 2020 NOL is driven by an unfortunate obsolescence of its primary product. Given great uncertainty in Syer’s future profitability, Syer’s management does not believe it is more likely than not that it will be able to realize deferred tax assets in future years. Syer’s federal tax rate decreased from 35% to 21% starting in 2018.arrow_forwardHow do I answer this? Carrot Company has been profitable in the past and expects to remain profitable in the future. Carrot sells a product for which it provides a 5-year warranty. For financial reporting purposes, Carrot estimates its future warranty costs and records a warranty expense and liability at year-end, whereas for income tax purposes the company deducts its warranty costs when paid. At the beginning of the current year, Carrot had a deferred tax asset of $500 related to the warranty liability on its balance sheet. At the end of the current year, the company estimates that its ending warranty liability is $2,000 Carrot had current year taxable income of $10,000 and is subject to an enacted future tax rate of 30%. Prepare a schedule to compute Carrot's (a) ending future deductible amount, (b) ending deferred tax asset, and (c) change in deferred tax asset for the current year (deferred tax benefit). For those boxes in which you must enter subtractive or negative number, use…arrow_forward
- 1. A tax payer receives an assessment notice from the BIR informing him that his total deficiency tax is 25,000 that is due last April 15. Upon receiving the notice the tax payers immediately filed and pay his tax on August 15. How much would be the total amount due? 2. Income tax return for the calendar year 2019 was due for filing on April 15, 2021 but the tax payer voluntarily filed his return without assessment notice from the BIR on June 30, 2021. The tax due per return amounts to 280,000. How much would be the total amount due? 3. The taxpayer's 2020 income tax return is to be filed through authorized agent bank under the jurisdiction of RDO East Manila. Without prior authorization from the BIR, the taxpayer filed his tax return and paid the tax through the authorized agent bank under the jurisdiction of RDO Laoag City? The tax due per return is 100,000. How much would be the total amount due? 4. In connection with problem number 3, the taxpayer also filed his return 3 months…arrow_forwardHallick, Incorporated has a fiscal year ending June 30. Taxable income was $7,100,000 for its year ended June 30, 2018, and it projects similar taxable income for its 2023 fiscal year. Use 2017 tax rate schedule if needed. Required: a. Compute Hallick's regular tax liability for its June 30, 2018, tax year. b. Compute Hallick's projected regular tax liability for its June 30, 2023, tax year. Answer is complete but not entirely correct. a. Regular tax liability b. Projected regular tax liability $ 2,414,000 $ 1,491,000€arrow_forwardBlossom Inc reports the following pre-tax incomes (losses) for both financial reporting purposes and tax purposes Accounting Income Year (Loss) Tax Rate i 2021 $124,000 2022 91,000 2023 (287,000) 2024 218,000 The tax rates lated were all enacted by the beginning of 2021. Blossom reports under the ASPE future Income tavas method. Prepare the journal entries for each of the years 2021 to 2024 to record Income tax. Assume the texclosa la first carried back and that at the end of 2023, the loss carry forward benefits are judged more likely than not to be realized in the future. (List all debit entries before credit entries. Credit account titles are automatically indented when the 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. Record journal entries in the order presented in the problem) Date Account Titles and Explanation (To record benefit from losa canryback) (To record deferred benefit from loss…arrow_forward
- IMPORTANT: PLEASE ANSWER CORRECTLY AND ILL LIKE THE QUESTION. Exercise 19-04 (Part Level Submission) Kingbird Company reports pretax financial income of $73,500 for 2020. The following items cause taxable income to be different than pretax financial income. 1. Depreciation on the tax return is greater than depreciation on the income statement by $17,600. 2. Rent collected on the tax return is greater than rent recognized on the income statement by $19,900. 3. Fines for pollution appear as an expense of $10,500 on the income statement. Kingbird’s tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2020.arrow_forwardAs the accountant for Monroe Trucking Company, you are preparing the company’s annual return, Form 940 andSchedule A. Use the following information to complete Form 940 and Schedule A on pages 5-52 to 5-54.The net FUTA tax liability for each quarter of 2019 was as follows: 1st, $97.00; 2nd, $87.00; 3rd, $69.70; and 4th,$59.50.Since the net FUTA tax liability did not exceed $500, the company was not required to make its first deposit ofFUTA taxes until January 31, 2020. Assume that the electronic payment was made on time.a. One of the employees performs all of his duties in another state—Louisiana.b. Total payments made to employees during calendar year 2019:Texas..........................$53,450Louisiana ...................22,150Total ..........................$75,600c. Employer contributions into employees’ 401(k) retirement plan: $1,250.d. Payments made to employees in excess of $7,000: $22,150.e. Form is to be signed by Vernon Scott, Vice President, and dated 1/31/20.f. Phone…arrow_forwardCurrent Attempt in Progress Sheridan Inc. reports the following pretax income Doss) for both financial reporting purposes and tax purposes. Year 2018 2019 2020 2021 The tax rates listed were all enacted by the beginning of 2018. (c) Prepare the journal entries for the years 2018-2021 to record income tax expense (benefit) and income taxes payable (refundable) and the tax effects of the loss carryforward, assuming that at the end of 2020 the benefits of the loss carryforward are judged more likely than not to be realized in the future. (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 for the amounts) 2018 Pretax Income (Loss) $128.000 96.000 (214.000) 310.000 2019 Date Account Titles and Explanation 2020 2021 Tax Rate 17 % 17% 19 % 19 % List of Accounts Safor Later Debit Credit Attempts:0 of 4 used Sub (b) The parts of this question must be completed in order. This…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT
The Basics of Tax Preparation; Author: Roosevelt University;https://www.youtube.com/watch?v=EJpTwf9b82M;License: Standard Youtube License