5. Hutson Company, a calendar-year corporation, recorded taxable net income (before tax) of $50,000 for the first quarter and$70,000 for the second quarter. The estimated effective annual tax rate was 25% at the end of the first quarter and 22% at theend of the second quarter. How much income tax expense should be recorded during the second quarter?a. $15,400b. $26,400c. $13,900d. $30,000e. None of the above.

To calculate the income tax expense for Hutson Company during the second quarter, we need to adjust…

Answered: 5. Hutson Company, a calendar-year…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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What is the income tax due using a 21 % federal income tax rate for a corporation with the following data: Gross income from sales: $40,000,000 Accumulated expenses for the year: $6,000,000 Depreciation charges for the year: $4,000,000
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In its first year of operations, Seagate Tech reported pretax accounting income of $780 million for the current year. Depreciation reported in the tax return in excess of depreciation in the income statement was $900 million. The excess tax will reverse itself evenly over the next three years. The current year's tax rate of 25% will be reduced under the current law to 30% next year and 35% for all subsequent years. At the end of the current year, the deferred tax liability related to the excess depreciation will be: Multiple Choice $315 million. $300 million. $270 million. $360 million.
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You have calculated the adjusted profit for the company to be $2,000,000. Capital Allowance was $20,000. The tax rate is 25%.Estimated tax paid during the year is $750,000. Employment Tax Credit available (which is nonrefundable)is $700,000. The tax refundable for this company is.a. $950,000b. $500,000c. $250,000d. $200,000
The pre-tax income statements for Moonstone Ltd. for two years (summarized) were as follows: 20X8 20X9 Revenues 266,000 S 330,000 Expenses 181,000 237,000 Pre-tax income s 85,000 $ 93,000 For tax purposes, the following income tax differences existed: a. Revenues on the 20X9 statement of profit and loss include $37,000 rent, which is taxable in 20X8 but was unearned at the end of 20X8 for accounting purposes. b. Expenses on the 20X9 statement of profit and loss include political contributions of $12,500, which are not deductible for income tax purposes. c. Expenses on the 20X8 statement of profit and loss include $20,900 of estimated warranty costs, which are not deductible for income tax purposes until 20X9. Required: 1. What was the accounting carrying value and tax basis for unearned revenue and the warranty liability at the end of 20X8 and 2OX9? 2. Compute (a) income tax payable, (b) deferred income tax, and (c) income tax expense for each period. Assume a tax rate of 30%. (Amounts…

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