Extracts from trial balance at 31 March, 2019Current tax credit balance1,600,000Deferred tax liability5,200,000The balance on current tax represents the under/over provision of the tax liability for the yearended 31 March, 2018. The required provision for income tax for the year ended 31 March2019 is GHe38-8 million. The difference between the carrying amounts of the net assets of thecompany and their (lower) tax base at 31 March, 2019 is GHe 54 million. The rate of incometax is 25%.Required:Prepare a Statement of Profit or Loss Extract and Statement of Financial Position Extract for31 March, 2019.

Deferred Tax Assets / Liability: When the book accounting profit is more than taxable profit then it…

Current tax credit balance 1,600,000 Deferred tax liability 5,200,000 the halance on current tax represents the under/over provision of the tax liability for the nded 31 March, 2018. The required provision for income tax for the year ended 31 Ma 019 is GHe38-8 million. The difference between the carrying amounts of the net assets o ompany and their (lower) tax base at 31 March, 2019 is GHe 54 million. The rate of inc

Current tax credit balance 1,600,000 Deferred tax liability 5,200,000 the halance on current tax represents the under/over provision of the tax liability for the nded 31 March, 2018. The required provision for income tax for the year ended 31 Ma 019 is GHe38-8 million. The difference between the carrying amounts of the net assets o ompany and their (lower) tax base at 31 March, 2019 is GHe 54 million. The rate of inc

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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Company K operates in a jurisdiction that levies an income tax with the following rate structure: Percentage Rate Bracket Income from -0- to $75,000 Income from $75,001 to $150,000 Income in excess of $150,000 Company K incurs a $35,000 deductible expense. Required: a. Compute the current year tax savings from the deduction assuming that Company K's taxable income before considering the additional deduction is $71,600. b. Compute the current year tax savings from the deduction assuming that Company K's taxable income before considering the additional deduction is $178,000. c. Compute the current year tax savings from the deduction assuming that Company K has a $7,250 loss before considering the additional deduction. 7% 10 15 Complete this question by entering your answers in the tabs below. Required A Required B Required C Compute the current year tax savings from the deduction assuming that Company K's taxable income before additional deduction is $71,600. Tax savings
Shirmp Tempura Company reported an excess of warranty expense over warranty deductions of P720,000 for the year ended December 31, 2019. This temporary difference will reverse in equal amounts over the years 2020 through 2022. The enacted tax rates are as follows: 2019 - 30% 2020 - 32% 2021 - 34% 2022 - 36% The reporting for this temporary difference at December 31, 2019 would be a A. deferred tax liability of P244,800. B. deferred tax asset of P216,000. C. deferred tax asset of P244,800. D. deferred tax liability of P216,000.
The following are details to calculate tax expense, tax payable and deferred taxes: Descriptions Gross Income: 2018:RM500,00.00; 2019: RM600,000.00; 2020: RM750,000.00; 2021: RM700,000.00 Heavy machinery with cost of RM300, 000.00 is depreciated annually for 10% using straight line method. Under tax rules, initial allowance is 20% and annual allowance is 2 20%. Rent revenue for rental of office space is RM3,000.00 per month (RM36,000.00 per annum) and shop outlet is RM5,000.00 per month (RM60,000.00 per annum). Office space rental received 2 years in advance for 2018. Meanwhile, shop outlet rental is accrued with balance brought forward RM10,000.00 in 2018; received 3 months advance in 2019 and 4 months accrued 2021. Recognized provision of warranty RM8,000.00 in 2018; RM10,000.00 in 2019; RM10,000.00 in 2020 and RM 15,000.00 in 2021. Warranty expenses claims were RM6000.00 for 2018; RM10,000.00 for 2019; RM12,000.00 for 2020 and RM11,000.00 for 2021. Tax rate is 25% 3 REQUIRED: a.…
1. In 2021, Dunder Mifflin's warranty deduction for tax purposes exceeded its warranty expense for book purposes by $654. Its pretax financial income in 2021 was $42800, and its tax rate was 27%. What amount of deferred tax liability should be reported on Dunder Mifflin's 2021 balance sheet? Assume no prior deferred tax balance. Choose the closest answer (round to the nearest two decimal places). a. $654.00 b. $11556.00 c. $176.58 d. None; Dunder Mifflin reports a deferred tax asset on its 2021 balance sheet.
Asnwer in 30 minutes Sherrod, Inc., reported pretax accounting income of $76 million for 2021. The following information relates to differences between pretax accounting income and taxable income: Income from installment sales of properties included in pretax accounting income in 2021 exceeded that reported for tax purposes by $3 million. The installment receivable account at year-end 2021 had a balance of $7 million (representing portions of 2020 and 2021 installment sales), expected to be collected equally in 2022 and 2023. Sherrod was assessed a penalty of $2 million by the Environmental Protection Agency for violation of a federal law in 2021. The fine is to be paid in equal amounts in 2021 and 2022. Sherrod rents its operating facilities but owns one asset acquired in 2020 at a cost of $80 million. Depreciation is reported by the straight-line method, assuming a four-year useful life. On the tax return, deductions for depreciation will be more than straight-line depreciation the…
A company prepared the following reconciliation for 2021: Pretax financial income for 2021 $719,000 Originating temporary difference 19,000 Permanent difference (38,000) Taxable income $xxxx (Figure this amount out on your own. Note: the parentheses outside the permanent difference mean subtraction). The temporary difference will reverse evenly over the next two years (i.e., 2022 and 2023). The enacted income tax rates are…
Shierling Ltd. reported pre-tax accounting income of $750,000 for calendar 2023. To calculate the income tax liability, the following data were considered: Non-taxable portion of capital gains $ 30,000 CCA in excess of depreciation 60,000 Instalment tax payments made during 2023 150,000 Enacted income tax rate for 2023 30% What amount should Shierling report as its current income tax liability on its December 31, 2023 SFP? a) $198,000 b) $75,000 c) $66,000 d) $48,000
Bramble Company has the following two temporary differences between its income tax expense and income taxes payable. 2020 2021 2022 Pretax financial income $844,000 $884,000 $948,000 Excess depreciation expense on tax return (30,800 ) (40,000 ) (9,500 ) Excess warranty expense in financial income 19,300 9,900 8,400 Taxable income $832,500 $853,900 $946,900 The income tax rate for all years is 20%. (a) Assuming there were no temporary differences prior to 2020, prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020, 2021, and 2022. (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 2020…
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
GIVEN: Tax due P1,500 Tax due date April 15,202A Date of filing and payment August 15, 202A COMPUTE: Total tax due and payable including compromise penalty.a. 2,500b. 2,560c. 2,935.16d. 2,950.21
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.)