Mercury Limited reported earnings of $75,000 in 20X9. The company has $55,000 of depreciation expense this year, and claimed CCA of $90,000. The tax rate was 25%. At the end of 20X8, there was a $10,000 loss carryforward reported in a deferred tax asset account valued at $2,200, and a deferred tax liability of $35,200 caused by capital assets with a net book value of $500,000 and UCC of $340,000 Required: What is the amount of income tax expense in 20X9? Tax expense S 23,250 Prepare the income tax entry or entries.

Mercury Limited reported earnings of $75,000 in 20X9. The company has $55,000 of depreciation expense this year, and claimed CCA of $90,000. The tax rate was 25%. At the end of 20X8, there was a $10,000 loss carryforward reported in a deferred tax asset account valued at $2,200, and a deferred tax liability of $35,200 caused by capital assets with a net book value of $500,000 and UCC of $340,000 Required: What is the amount of income tax expense in 20X9? Tax expense S 23,250 Prepare the income tax entry or entries.

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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Grand Corporation reported pre-tax book income of $600,000. Tax depreciation exceeded book depreciation by $400,000. In addition, the company received $300,000 of tax-exempt municipal bond interest. The company’s prior year tax return showed taxable income of $40,000. Assuming a tax rate of 21%, compute the company’s current income tax expense or benefit. (Enter the answer as a positive.) Please explain step by step because I'm not getting the correct answer.
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?
A chemical company has a total income of 1.62 million per year and total expenses of 716057 not including depreciation. At the start of the first year of operation, a composite account of all depreciable assets shows a value of 1.24 with a MACRS recovery period of 7 years, and a straight-line recovery period of 9.4 years. Thirty-five percent of all profits before taxes must be paid out for income taxes. What would be the reduction in income tax charges for the first year of operation if the MACRS method were used for the depreciation accounting instead of the straight-line method?-
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
(Working with the income statement) At the end of its third year of operations, the Sandifer Manufacturing Co. had $4,522,000 in revenues, $3,362,000 in cost of goods sold, $458,000 in operating expenses which included depreciation expense of $140,000, and a tax liability equal to 34 percent of the firm's taxable income. Sandifer Manufacturing Co. plans to reinvest $52,000 of its earnings back into the firm. What does this plan leave for the payment of a cash dividend to Sandifer's stockholders? Complete the income statement for Sandifer Manufacturing Co.: (Round to the nearest dollar.) Revenues = Less: Cost of Goods Sold = Less: Operating Expenses Less: Interest Expense Less: Income Taxes = = $ $ $ $ Equals: Gross Profit = ... Equals: Net Operating Income = 0 Equals: Earnings before Taxes Equals: Net Income = = $ GA GA $
Edwards Electronics recently reported $15,250 of sales, $5,500 of operating costs other than depreciation, and $1,250 of depreciation. The company had no amortization charges, it had $3,500 of bonds that carry a 6.25% interest rate, and its federal-plus-state income tax rate was 25%. How much was its net operating profit after taxes (NOPAT)? Select the correct answer. a. $6,324.00 b. $6,349.50 Oc$6,273.00 O d. $6,298.50 e. $6,375.00
Pearson brothers recently reported an EDITDA of $7.5 million and net income of $1.8 million. It had $2.0 million of interest expense, and its corporate tax rate was 40%. What was it's charge for depreciation and amortization?
During 2018, Raines Umbrella Corporation had sales of $749,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $576,000, $101,000, and $131,000, respectively. In addition, the company had an interest expense of $99,000 and a tax rate of 40 percent. (Ignore any tax loss carryback or carryforward provisions.) Assume Raines Umbrella Corporation paid out $16,000 in cash dividends. If spending on net fixed assets and net working capital was zero, and if no new stock was issued during the year, what is the firm's net new long-term debt?
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 40%. Assume that no estimated taxes have been paid. What should Tringali report as income tax payable for its first year of operations? a.$8,000 b.$120,000 c.$106,000 d.$114,000
During the year, Pharr Corporation had sales of $459,000. Costs were $388,000 and depreciation expense was $102,800. In addition, the company had an interest expense of $79.250 and a tax rate of 21 percent. What is the operating cash flow for the year? Ignore any tax loss carry-forward provisions. Multiple Choice $72,733 $77,768 O $15,071
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? Tax expense Prepare the income tax entry or entries. View transaction list No 1 Date 20X8 View journal entry worksheet Income tax expense Income tax payable Deferred income tax asset General Journal Debit Credit 114,750