Sheridan corporation reports pretax financial income of $73,500 for 2025. The following items cause taxable income to be different than pretax financial income. 1. Depreciation on the tax return is greater than depreciation on th eincome statement by $17,600 2. Rent collected on the tax return is greater than rent recognized on the income statement by $19,900 3. Fines for pollution appear as an expense of $10,500 on the income statement Sheridan's tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2025.  Compute taxable income and income taxes payable for 2025

Nirvana Corporation reports pretax financial income of $260,000 for 2022. The following items cause taxable income to be different than pretax financial income.   Rental income on the 2022 tax return is $65,000 greater than on the income statement. Depreciation expense on the tax return is greater than depreciation on the income statement by $40,000. Interest on an investment in a municipal bond of $6,500 is reported on the income statement.   Nirvana's tax rate is 25% for all years. There are no deferred taxes at the beginning of 2022. The company expects to realize only 40% of the benefit of any deferred tax assets. The fiscal year ends December 31, 2022.   Required: 1. Prepare the journal entries to record i) income tax expense, income taxes payable, and deferred income taxes for 2022, and ii) any valuation allowance needed.   2. Indicate clearly what would be reported on the income statement beginning with income before income taxes for the year ended December 31, 2022 from just…

Carla Corporation has a cumulative temporary difference related to depreciation of $556,000 at December 31, 2025. This difference will reverse as follows: 2026, $39.000; 2027, $226.000; and 2028, $291,000. Enacted tax rates are 17% for 2026 and 2027, and 20% for 2028. Compute the amount Carla should report as a deferred tax liability at December 31, 2025. Deferred tax liability at December 31, 2025 $

At the beginning of 2025, Pronghorn Construction Company changed from the cost-recovery method to recognizing revenue over time (percentage-of-completion) for financial reporting purposes. The company will continue to use the cost- recovery method for tax purposes. For years prior to 2025, pretax income under the two methods was as follows: percentage-of-completion $114,200, and cost-recovery $78,200. The tax rate is 40%. Pronghorn has a profit-sharing plan, which pays all employees a bonus at year-end based on 2% of pretax income. Compute the indirect effect of Pronghorn's change in accounting principle that will be reported in the 2025 income statement, assuming that the profit-sharing contract explicitly requires adjustment for changes in income numbers. Indirect effect