ABC Inc. has asked you to assist in the completion of their 2018 tax provision. Theyhave provided you with the following information;NBV at 12/31/2017$600,000UCC at 12/31/2017320,000Warranty provision80,000Tax rate45%The following transactions occurred during 2018:Income before taxes$1,600,000Depreciation160,000Warranty provision50,000Actual warranty expenditures70,000Class 8 additions200,000Disallowed entertainment75,000Dividends from a taxable Canadian corporation100,000REQUIRED1. Prepare a reconciliation of accounting income to income for tax purposes2. Prepare the journal entries to record the 2018 tax provision

Tax liability and incomeThe amount of money paid by the government on the income or gains earned by…

ABC Inc. has asked you to assist in the completion of their 2018 tax provision. They have provided you with the following information; NBV at 12/31/2017 UCC at 12/31/2017 Warranty provision Tax rate $600,000 320,000 80,000 45% The following transactions occurred during 2018: Income before taxes $1,600,000 Depreciation Warranty provision 160,000 50,000 Actual warranty expenditures 70,000 Class 8 additions 200,000 Disallowed entertainment 75,000 Dividends from a taxable Canadian corporation 100,000 REQUIRED 1. Prepare a reconciliation of accounting income to income for tax purposes 2. Prepare the journal entries to record the 2018 tax provision

ABC Inc. has asked you to assist in the completion of their 2018 tax provision. They have provided you with the following information; NBV at 12/31/2017 UCC at 12/31/2017 Warranty provision Tax rate $600,000 320,000 80,000 45% The following transactions occurred during 2018: Income before taxes $1,600,000 Depreciation Warranty provision 160,000 50,000 Actual warranty expenditures 70,000 Class 8 additions 200,000 Disallowed entertainment 75,000 Dividends from a taxable Canadian corporation 100,000 REQUIRED 1. Prepare a reconciliation of accounting income to income for tax purposes 2. Prepare the journal entries to record the 2018 tax provision

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 18E

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Aloha Company provided the following information on December 31, 2020: Carrying amount Tax base Accounts receivable 1,500,000 1,750,000 Motor vehicle 1,650,000 1,250,000 Provision for warranty 120,000 0 Deposits received in advance 150,000 0 The depreciation rates for accounting and taxation are 15% and 25% respectively. The deposits are taxable when received and warranty costs are deductible when paid. An allowance for doubtful accounts of P250,000 has been raised against accounts receivable for accounting purposes but such accounts are deductible only when written off as uncollectible. The entity showed accounting income before tax of P8,000,000 for 2020. The income tax rate is 30% Thre are no temporary differences at the beginning of the current year: Required:…
1. Prepare journal entries to record the income tax and 2. Present the income tax expense in the income statement Problem 16-3 (ACP) In 2021, Argentina Company received an advance payment of P1,000,000, which was subject to tax but not reported in accounting income until 2022. The income statement and tax return showed the following: 2021 2022 Income before tax per income statement Income before tax per tax return Income tax rate 6,000,000 7,000,000 9,000,000 8,000,000 25% 25% Required: 1. Prepare journal entries to record the income tax a deferred tax for 2021 and 2022. for 2021 and 2022.
Bonita Inc. reports the following pretax income (loss) for both book and tax purposes. Pretax Year Income (Loss) Tax Rate 2018 $124,000 20 % 2019 86,000 20 % 2020 (89,000 ) 25 % 2021 126,000 25 % The tax rates listed were all enacted by the beginning of 2018. Prepare the journal entries for years 2018-2021 to record income tax expense (benefit) and income taxes payable, and the tax effects of the loss carryforward, assuming that based on the weight of available evidence, it is more likely than not that one-half of the benefits of the loss carryforward will not be realized. (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.)
Zhao Inc. reports the following pre-tax incomes (losses) for both financial reporting purposes and tax purposes: Year 2021 2022 2023 2024 Accounting Income (Loss) $ 20,000 50,000 (150,000) 120,000 Tax Rate 25% 28% 30% 30% The tax rates listed were all enacted by the beginning of 2021. Zhao reports under the ASPE future income taxes method and uses a valuation allowance to account for future tax assets. Instructions a) Assume that at the end of 2023 it is more likely than not that 20% of the carry forward benefits will not be realized. Prepare the journal entries for 2023 and 2024. b) Based on your entries in part (a), prepare the income tax section of the 2023 and 2024 income statements, beginning with the line "Operating income (loss) before income tax." c) Indicate how the future tax asset account will be reported on the December 31, 2023 and 2024 balance sheets. d) Repeat part (c) assuming Zhao Inc. follows IFRS.
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Xenun Inc. uses the accrual method of accounting for financial reporting purposes and appropriately uses the installment method of accounting for income tax purposes. Profits of $1,200,000 recognized for books in 2020 will be collected in the following years: Collection of Profits $200,000 $400,000 2021 2022 2023 $600,000 The enacted tax rate is 30% for 2020 and 2021. The enacted tax rate is 35% for 2022 and 2023. Prepared the necessary journal entries for 2020, 2021, 2022, and 2023.
1.The Mosaic Company organized on January 2, 2021, had pretax accounting income of $8,000,000 and taxable income of $11,600,000 for the year ended December 31, 2021. The 2021 tax rate was 25%. The only difference between book and taxable income is estimated warranty costs. Expected payments and scheduled enacted tax rates are as follows: 2022 $ 1,200,000 30 % 2023 600,000 30 % 2024 600,000 30 % 2025 1,200,000 35 % Required:Prepare one compound journal entry to record Mosaic's provision for taxes for the year 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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carala vista company has the following two temporary difference between its income tax expense and income taxes payable 2025 2026 2027 pretax financial income 854,000. 949,000. 962,000 excess deprecaition expense on tax return (29,800. (41,800) (9900) excess warranty expense in financial income 19800 10500 8100 taxable income 844000 917700 960200 the income tax rate for all years is 20% indicate how deferred taxes will be reported on the 2027 balance sheet carla vistas product warranty is or 12 months
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Oriole Inc. reports the following pretax income (loss) for both book and tax purposes. Year 2023 2024 2026 2025 (96,000) 114,000 Pretax Income (Loss) $114,000 (a) 91,000 Tax Rate 2023 20% 20% 25% The tax rates listed were all enacted by the beginning of 2023. 25% Prepare the journal entries for years 2023-2026 to record income tax expense (benefit) and income taxes payable (refundable), and the tax effects of the loss carryforward, assuming that based on the weight of available evidence, it is more likely than not that one-half of the benefits of the loss carryforward will not be realized. (List all debit entries before credit entries. 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. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit