A17-20 Loss Carryback/Carryforward; Temporary Differences; Rate Change (LO 17-2, 17-3, 17-4, 17-6)On 1 January 20X4, Dart Incorporated commenced business operations. The following information is available to you:20X4$90,000Earnings (loss) before taxTax rate (enacted in each year)Depreciation (original cost of assets, $1,000,000)Capital cost allowanceRental revenue recognized*View transaction listJournal entry worksheet1234536%50,00060,00060,0006*There is a rent receivable account at the end of 20X4, because rent revenue was earned in 20X4 but will not be collected until 20X6.This amount is not part of taxable incon In 20X4, but will be taxable income in 20X6 when it is collected.20X5$(410,000)Required:Prepare Journal entries to record tax for 20X4, 20X5, 20X6, and 20X7. Assume that the tax loss carryforward usage in 20X5 isconsidered to be not probable but that in 20X6 the balance of probability shifts and in 20X6 the loss usage is considered to beprobable. (If no entry is required for a transaction/event, select "No Journal entry required" in the first account field.)Record entry for set-off of current income tax expense payable against losscarryforward.36%50,000020X6$100,00032%50,000120,00020X7$120,00030%50,000110,0004

Deferred tax asset: The deferred tax asset is created when the taxes to be paid as per income tax…

On 1 January 20X4, Dart Incorporated commenced business operations. The following information is available to you: Earnings (loss) before tax Tax rate (enacted in each year) Depreciation (original cost of assets, $1,000,000) Capital cost allowance Rental revenue recognized* 20X4 $90,000 36% 50,000 60,000 60,000 20X5 $(410,000) 36% 50,000 0 20X6 $100,000 32% 50,000 120,000 20X7 $120,000 30% 50,000 110,000

On 1 January 20X4, Dart Incorporated commenced business operations. The following information is available to you: Earnings (loss) before tax Tax rate (enacted in each year) Depreciation (original cost of assets, $1,000,000) Capital cost allowance Rental revenue recognized* 20X4 $90,000 36% 50,000 60,000 60,000 20X5 $(410,000) 36% 50,000 0 20X6 $100,000 32% 50,000 120,000 20X7 $120,000 30% 50,000 110,000

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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Umasa Corporation reported the following information for the current year: Pretax financial income Income from exempt municipal bonds Rent received in advance P 9,000,000.00 2,000,000.00 1,500,000.00 Depreciation deduction for income tax purposes in excess of depreciation reported for financial reporting purposes Estimated tax payment for current year Income tax rate 1,000,000.00 500,000.00 30% 21. What amount of current tax liability should be reported at the year-end? B. P2,250,000 A. P1,750,000 C. P2,750,000 D. P2,850,000 22. What is the total tax expense? A. P2,700,000 B. P2,100,000 C. P2,250,000 D. P1,600,000
The 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?
Stone 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. $3,500
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. For the year ended December 31, 20x1, Mont Co's books showed income of P600,000 before provision for income tax expense. To compute taxable income for taxation purposes, the following items should be noted: Income from exempt municipal bonds Depreciation deducted for tax purposes in excess of depreciation recorded on the books Proceeds received from life insurance on death of officer Estimated tax payments 60,000 120,000 100,000 30% Enacted corporate tax rate What amount should Mont report at December 31, 20x1, as its income tax liability? a. 96,000 (AICPA) b. 114,000 c. 156,000 d. 162,000
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