FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
Bartleby Related Questions Icon

Related questions

Question
100%

please see image

Problem 19-08 (Part Level Submission)
The following information was disclosed during the audit of Whispering Inc.
Amount Due
per Tax Return
$129,100
1.
Year
2020
2021
108,600
2. On January 1, 2020, equipment costing $579,300 is purchased. For financial reporting purposes, the company uses straight-line depreciation over a 5-year life. For tax purposes, the company uses the elective straight-line method over a 5-year life. (Hint: For tax purposes, the half-year convention as discussed in Appendix 11A must be used.)
3. In January 2021, $214,500 is collected in advance rental of a building for a 3-year period. The entire $214,500 is reported as taxable income in 2021, but $143,000 of the $214,500 is reported as unearned revenue in 2021 for financial reporting purposes. The remaining amount of unearned revenue is to be recognized equally in 2022 and 2023.
4. The tax rate is 20% in 2020 and all subsequent periods. (Hint: To find taxable income in 2020 and 2021, the related income taxes payable amounts will have to be "grossed up.")
5. No temporary differences existed at the end of 2019. Whispering expects to report taxable income in each of the next 5 years.
- (a)
Determine the amount to report for deferred income taxes at the end of 2020, and indicate how it should be classified on the balance sheet.
Amount to report for deferred income taxes
Whispering Inc.
Balance Sheet
Click if you would like to Show Work for this question: Open Show Work
expand button
Transcribed Image Text:Problem 19-08 (Part Level Submission) The following information was disclosed during the audit of Whispering Inc. Amount Due per Tax Return $129,100 1. Year 2020 2021 108,600 2. On January 1, 2020, equipment costing $579,300 is purchased. For financial reporting purposes, the company uses straight-line depreciation over a 5-year life. For tax purposes, the company uses the elective straight-line method over a 5-year life. (Hint: For tax purposes, the half-year convention as discussed in Appendix 11A must be used.) 3. In January 2021, $214,500 is collected in advance rental of a building for a 3-year period. The entire $214,500 is reported as taxable income in 2021, but $143,000 of the $214,500 is reported as unearned revenue in 2021 for financial reporting purposes. The remaining amount of unearned revenue is to be recognized equally in 2022 and 2023. 4. The tax rate is 20% in 2020 and all subsequent periods. (Hint: To find taxable income in 2020 and 2021, the related income taxes payable amounts will have to be "grossed up.") 5. No temporary differences existed at the end of 2019. Whispering expects to report taxable income in each of the next 5 years. - (a) Determine the amount to report for deferred income taxes at the end of 2020, and indicate how it should be classified on the balance sheet. Amount to report for deferred income taxes Whispering Inc. Balance Sheet Click if you would like to Show Work for this question: Open Show Work
Expert Solution
Check Mark
Knowledge Booster
Background pattern image
Accounting
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.
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education