FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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cardinal corporation reported pretax book income of $3,000,000
calculate income tax expense, deferred tax , taxable income, book equivalent, effective tax rate
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- Information for Hobson Corp. for the current year ($ in millions): Income from continuing operations before tax $ 160 Loss on discontinued operation (pretax) 20 Temporary differences (all related to operating income): Accrued warranty expense in excess of expenseincluded in operating income 20 Depreciation deducted on tax return in excess ofdepreciation expense 25 Permanent differences (all related to operating income): Nondeductible portion of entertainment expense 10 The applicable enacted tax rate for all periods is 40%. How much tax expense on income from continuing operations would be reported in Hobson's income statement? multiple choice: a. 66 million b. 64 million c. 68 million d. 44 million I have tried several different ways but none of them come up with answers close to any of the ones to choose from.arrow_forwardFor its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Pretax accounting income $ 280,000 Permanent difference (15,600 ) 264,400 Temporary difference-depreciation (20,900 ) Taxable income $ 243,500 Tringali's tax rate is 25%. Assume that no estimated taxes have been paid. What should Tringali report as its deferred income tax liability as of the end of its first year of operations?arrow_forwardThe following information pertains to XYZ Inc Year Taxable Income(loss) tax rate taxes paid 2009 $100,000 25% $25,000 2010 $250,000 30% $75,000 2011 $360,000 22% $79,2000 2012 $400,000 26% $104,000 2013 $500,000 24% $120,000 2014 $(600,000) 25% _ Assuming that XYZ has a policy of tax refund maximization , how much would the company be able to recover in taxes through the use of its 2014 tax loss?arrow_forward
- Vishnuarrow_forwardRange Rover Inc. had taxable income of $152,000 for the year. The GAAP basis of accounts receivable (net) $9,600 less than the tax basis of accounts receivable. Assuming a tax rate of 25%, record the income tax journal entry on December 31. Assume zero beginning balances in deferred tax accounts Note: faline in a journal entry ant required for the transaction select N/A as the account names and leave the Dr. and Cr. answers blank (zero) Dr. Account Name Date Dec 31 income Tax Expose Income Tax Payate Deferred Tax Asset Tocesant incomearrow_forwardDix Company reported operating income (loss) before income tax in its first three years of operations as follows: 20X1 $ 100,000 20X2 (200,000 ) 20X3 240,000 Dix had no permanent or temporary differences between book income and taxable income in these years. Assume a 21% tax rate for all years, and assume there is no valuation allowance. Required: What amount of taxes does Dix pay related to its 20X3 tax return?arrow_forward
- Livia Company’s pretax income was $72,000. To compute taxable income, the following information is provided: Excess of estimated bad debts over write-offs $26,000 Penalty for late filing of income taxes 21,000 Excess of tax depreciation over accounting depreciation 36,000 Tax rate 20% What is the current portion of income tax? $12,400 $6200 $16,600 $22,600arrow_forwardSkysong Corporation had the following tax information. Year Taxable Income Tax Rate Taxes Paid 2023 $276,000 35 % $96,600 2024 299,000 30 89,700 2025 368,000 30 110,400 In 2026, Skysong suffered a net operating loss of $441,600, which it elected to carryback. The 2026 enacted tax rate is 29%. Prepare Skysong's entry to record the effect of the loss carryback. (List debit entry before credit entry. 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 enter O for the amounts.) Account Titles and Explanation Debit Creditarrow_forwardThe Guava Corporation has book net income of $90,000 for the current year. Included in this figure are the followingitems which are reported on the corporation's Schedule M-1, Reconciliation of Income (Loss) per Books with Income perReturn1. Federal income tax expense $25,0002. Depreciation deducted on books, not deductible for tax purposes 4,0003. Deduction for 50 percent of meals exp. not allowed for tax purposes (no calculation needed) 3,0004. Deduction for payroll tax penalties not allowed for tax purposes 2,0005. Tax exempt interest income included in book income but not in tax return income 12,000Based on the above information, calculate the Guava Corporation's taxable income for the year. Show your calculations please so i can understand the steps?arrow_forward
- Munabhaiarrow_forwardFor its first year of operations, Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Pretax accounting income $ 300,000 Permanent difference (15,000 ) 285,000 Temporary difference-depreciation (20,000 ) Taxable income $ 265,000 Tringali's tax rate is 25%. Assume that no estimated taxes have been paid. What should Tringali report as its deferred income tax liability as of the end of its first year of operations?arrow_forwardStone Company reported pre-tax book income of $700,000 in 20X1, the first year of operation. The tax depreciation exceeded the book depreciation by $90,000. The tax rate for 20X1 and all future years was 21%. What amount of deferred tax liability should Stone report in its December 31, 20X1, balance sheet? Select one: a. $6,300 b. $14,000 c. $18,900 d. $3,500arrow_forward
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