On January 1, 2017, Girdwood Inc. has decided to change its revenue recognition policy from the completed-contract to the percentage-of-completion method to align its policies with current industry reporting standards.   The following is information regarding the completed-contract and percentage-of-completion methods:    2015 2016 2017 Completed-contract revenue $ 15,000 $ 55,000 $ 23,000 Percentage-of-completion revenue  25,000 70,000  28,000 Income before tax, completed-contract basis  65,000 70,000 60,000 Opening retained earnings, completed-contract basis  150,000 180,000 200,000   The income tax rate for each of the 3 years is 40%. Assume any tax difference due to change in amortization expense policy is a temporary difference. Dividends for 2017 are $10,000.    Required: Restate and prepare the Statement of Stockholders’ Equity for 2015-2017, assuming the change in policy is to be applied retroactively. Prepare the journal entry to properly reflect the accounting change in 2017.

Dry Valley Corporation reported the following items in its adjusted trial balance for the year ended December 31, 2026: Income from continuing operations before income taxes Gain on disposal of discontinued component Loss from operations of discontinued component Dry Valley is subject to a 20% tax rate. Instructions $120,000 28,000 (60,000) Prepare the December 31, 2026, income statement for Dry Valley Corporation, starting with income from continuing operations before income taxes.

*see attached problem REQUIRED: What is the deferred tax balance by the end of 2020?

Arnold Industries has pretax accounting income of $33 million for the year ended December 31, 2016. The tax rate is 40%. The only difference between accounting income and taxable income relates to an operating lease in which Arnold is the lessee. The inception of the lease was December 28, 2016. An $8 million advance rent payment at the inception of the lease is tax-deductible in 2016 but, for financial reporting purposes, represents prepaid rent expense to be recognized equally over the four-year lease term. Required: 1. Determine the amounts necessary to record Arnold’s income taxes for 2016 and prepare the appropriate journal entry. 2. Determine the amounts necessary to record Arnold’s income taxes for 2017 and prepare the appropriate journal entry. Pretax accounting income was $50 million for the year ended December 31, 2017. 3. Assume a new tax law is enacted in 2017 that causes the tax rate to change from 40% to 30% beginning in 2018. Determine the amounts necessary to record…

NSync Manufacturing has a deferred tax asset account with a balance of P300,000 at the end of 2015 due to a single cumulative temporary difference of P 750,00. At the end of 2016, this same temporary difference has increased to a cumulative amount of P1,000,000. Taxable income for 2016 is P1,700,000. The tax rate is 40% for 2016, but enacted tax rates for all future years are 35%. Assuming it’s probable that 70% of the deferred tax asset will be realized, what amount will be reported on NSync manufacturing statement of financial position for the deferred tax asset at December 31, 2016

During the preparation of financial statement for Master Ltd for 2023 it was discovered thatan amount of $22,000, incurred in September 2021 and payable to an overseas supplier, wasoverlooked and not paid or provided for in the financial statement ending 30 June 2022. Theamount is considered to be material and will be permitted as a deduction for tax purposes(tax rate 30%).Required:i) Prepare the necessary journal entry to correct this error.

(Two Differences, One Rate, Beginning Deferred Balance, Compute Pretax Financial Income) Andy McDowell Co. establishes a $100 million liability at the end of 2017 for the estimated site-cleanup costs at two of its manufacturing facilities. All related closing costs will be paid and deducted on the tax return in 2018. Also, at the end of 2017, the company has $50 million of temporary differences due to excess depreciation for tax purposes, $7 million of which will reverse in 2018. The enacted tax rate for all years is 40%, and the company pays taxes of $64 million on $160 million of taxable income in 2017. McDowell expects to have taxable income in 2018.Instructions(a) Determine the deferred taxes to be reported at the end of 2017.(b) Indicate how the deferred taxes computed in (a) are to be reported on the balance sheet.(c) Assuming that the only deferred tax account at the beginning of 2017 was a deferred tax liability of $10,000,000, draft the income tax expense portion of the income…

15. ABC began operating on January 1, 2020. At the end of the first year of operation, ABC reported P7,000,000 income before income tax on its statement of financial performance and P2,500,000 taxable income on its tax return. Analysis of the P4,500,000 revealed that P3,500,000 was a difference without future tax consequence, and the other P1,000,000 was a temporary difference related to prepaid rent which is expected to reverse in 2022. At the end of 2021, the accumulated temporary tax liability difference related to future years is P1, 500,000. The P500,000 increase is due to an accrued income taxable only when actual collection is made, which is expected on the year 2022. The current and enacted future tax rate is 30%. Assume that the income before tax in 2021 and 2022 are P6,500,000 and P7,200,000, respectively. There is no permanent difference during these years. Following the rules applicable in accounting for deferred taxes, compute the deferred tax liability as of the end of…

Lewes Company appropriately uses the installment sales method for tax purposes and the accrual method for revenue recognition for accounting purposes. Pertinent data at December 31, 2016, the close of the first year of operations, are as follows:   Revenue Recognized Revenue Recognized Customer for Accounting Purposes for Tax Purposes Lowe's Builders $200,000 $100,000 Top Down Plumbing 500,000 350,000 Glass Plus Windows 600,000 350,000 Lewes's tax rate is 30%. What amount should be included in the deferred tax account at December 31, 2016 for these installment sales?

At the beginning of 2016, Norris Company had a deferred tax liability of $6,600, because of the use of MACRS depreciation for income tax purposes and units-of-production depreciation for financial reporting. The income tax rate is 30% for 2015 and 2016, but in 2015 Congress enacted a 39% tax rate for 2017 and future years. Norris’s accounting records show the following pretax items of financial income for 2016: income from continuing operations, $120,300 (revenues of $351,500 and expenses of $231,200); gain on disposal of Division F, $24,000; loss from operations of discontinued Division F, $11,500; and prior period adjustment, $14,100, due to an error that understated revenue in 2015. All of these items are taxable; however, financial depreciation for 2016 on assets related to continuing operations exceeds tax depreciation by $4,600. Norris had a retained earnings balance of $161,300 on January 1, 2016, and declared and paid cash dividends of $32,800 during 2016. Required: 1.…