tcesHafnaoui Company reported pretax net income from continuing operations of $1,168,000 and taxable income of$695,500. The book-tax difference of $472,500 was due to a $315,000 favorable temporary difference relating todepreciation, an unfavorable temporary difference of $126,000 due to an increase in the reserve for bad debts, and a$283,500 favorable permanent difference from the receipt of life insurance proceeds. At the end of the year, the reservefor bad debts had a balance of $157,500; the beginning balance in the account was $31,500. Hafnaoui's beginning book(tax) basis in its fixed assets was $1,046,000 ($869,000) and its ending book (tax) basis is $1,615,000 ($1,123,000).Problem 17-77 Part b (Algo)b. Compute Hafnaoui Company's deferred income tax expense or benefit.Note: Enter all numbers as a positive number and indicate whether a deferred tax expense or a deferred tax benefit.

After deducting all costs, taxes, and interest from revenues that were incurred during the…

Answered: Hafnaoui Company reported pretax net…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Pine Ltd is reviewing its deferred tax for the year. In each of the following situations prepare the end-of-period adjustment journal entries to account for income tax on the initial appearance or reversal of any temporary differences. Explain in each case why particular accounts are affected. 1.The company purchased a depreciable asset at the beginning of the year for $200 000. For accounting purposes, an annual depreciation rate of 20% straight-line is used, whereas for taxation the rate is 30% straight-line. 2.The company’s provision for long-service leave at the beginning and end of the year are $80 000 and $77 500 respectively. In the current year, $10 000 in long-service leave was paid to a long-standing employee. 3. The company has interest receivable of $25 000 at the end of the year. No interest was receivable at the beginning of the year. Interest income is included in taxable profit only when received. 4.The company has revalued land at the end of the year. The…
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 $22,600
am.115.
Sol Limited. reported earnings of $510,000 in 20X8. The company has $91,000 of depreciation expense this year, and claimed CCA of $142,000. The tax rate was 25%. At the end of 20X7, there was a $122,000 loss carryforward that was not recorded because use was considered less than probable. The company also reported a deferred tax liability of $71,000 caused by capital assets with a net book value of $1,310,000 and UCC of $1,010,000. The tax rate had been 20% in 20X7. Required:What is the amount of income tax expense in 20X8? Prepare the income tax entry or entries. - Record the entry income tax expense. - Record the entry loss carryforward.
Munabhai
For 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?
Hopkins Co. at the end of 2010, its first year of operations, prepared a reconciliation between pretar financial income and taxable income as follows: Pretax financial income S 750.000 Estimated litigation expense 1,000,000 Extra depreciation for taxes (1.500.000) Taxable income 5.250.000 The estimated litigation expense of $1,000,000 will be deductible in 2011 when it is expected to be paid. Use of the depreciable assets will result in taxable amounts of $500,000 in each of the next three years. The income tax rate is 30% for all years. Income tax payable is Select one: a. $75,000. b. S0. C $150,000. d. $225,000.
Required information [The following information applies to the questions displayed below.] Hafnaoui Company reported pretax net income from continuing operations of $903,500 and taxable income of $712,500. The book-tax difference of $191,000 was due to a $242,000 favorable temporary difference relating to depreciation, an unfavorable temporary difference of $117,000 due to an increase in the reserve for bad debts, and a $66,000 favorable permanent difference from the receipt of life insurance proceeds. b. Compute Hafnaoui Company's deferred income tax expense or (benefit). Note: Enter all numbers as a positive number and indicate whether a deferred tax expense or a deferred tax benefit. X Answer is complete but not entirely correct. Deferred income tax expense $ 712,500
Book income of $1,900,000 Included in the computation were favorable temporary differences of $230,000, unfavorable temporary differences of $226,000 and favorable permanent differences of $168,000. What is the company's deferred income tax expense or benefit?
Hafnaoui Company reported pretax net income from continuing operations of $912,000 and taxable income of $587,500. The book–tax difference of $352,500 was due to a $235,000 favorable temporary difference relating to depreciation, an unfavorable temporary difference of $94,000 due to an increase in the reserve for bad debts, and a $211,500 favorable permanent difference from the receipt of life insurance proceeds. At the end of the year, the reserve for bad debts had a balance of $117,500; the beginning balance in the account was $23,500. Hafnaoui's beginning book (tax) basis in its fixed assets was $1,014,000 ($821,000) and its ending book (tax) basis is $1,535,000 ($1,107,000). a. Compute Hafnaoui Company's current income tax expense. b. Compute Hafnaoui Company's deferred income tax expense or benefit. c. Compute Hafnaoui Company's effective tax rate. d. Provide a reconciliation of Hafnaoui Company's effective tax rate with its hypothetical tax rate of 21 percent.
DEF Co. reported taxable income of P8M in its income tax return for the 1st year of operations. The entity revealed the following temporary differences between financial income and taxable income for the year:Tax depreciation in excess of book depreciation, P800,000Accrual for product liability claim in excess of actual claim, P1,200,000Reported installment sales income in excess of taxable installment sales income, P2,600,000Income tax rate, 30%Compute for the deferred tax expense for the 1st year
Grand Corporation reported pretax book income of $612,000. Tax depreciation exceeded book depreciation by $408,000. In addition, the company received $306,000 of tax-exempt municipal bond interest. The company's prior-year tax return showed taxable income of $51,000. Compute the company's current income tax expense or benefit. (Leave no answer blank. Enter N/A or zero.) 이 Current income tax Deferred income tax N/A expense $

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS