Question Content Area ParentCo and SubCo report the following items of income and deduction for the current year. ParentCo's SubCo's Taxable Item Taxable Income Income Income (loss) from operations $ 100,000 ($10,000) § 1231 loss (5,000) Capital gain 15,000 Charitable contribution 12,000 Compute ParentCo and SubCo's 2023 taxable income or loss computed on a separate basis. ParentCo SubCo a. $85,000 $ 3,000 b. $85,500 $3,000 c. $85,500 $5,000 d. $85,000 $5,000

Question Content Area ParentCo and SubCo report the following items of income and deduction for the current year. ParentCo's SubCo's Taxable Item Taxable Income Income Income (loss) from operations $ 100,000 ($10,000) § 1231 loss (5,000) Capital gain 15,000 Charitable contribution 12,000 Compute ParentCo and SubCo's 2023 taxable income or loss computed on a separate basis. ParentCo SubCo a. $85,000 $ 3,000 b. $85,500 $3,000 c. $85,500 $5,000 d. $85,000 $5,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 9P: Interperiod Tax Allocation Peterson Company has computed its pretax financial income to be 66,000 in...

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Interperiod Tax Allocation Peterson Company has computed its pretax financial income to be 66,000 in 2019 after including the effects of the appropriate items from the following information: Petersons accountant has prepared the following schedule showing the future taxable and deductible amounts at the end of 2019 for its three temporary differences: At the beginning of 2019, Peterson had a deferred tax liability of 12,540 related to the depreciation difference and 4,710 related to the accrual-basis sales difference. In addition, it had a deferred tax asset of 14,850 related to the warranty difference. The current tax rate is 30%, and no change in the tax rate has been enacted for future years. Required: 1. Compute Petersons taxable income for 2019. 2. Prepare Petersons income tax journal entry for 2019 (assume no valuation allowance is necessary). 3. Next Level Identify the permanent differences in Items 1 through and explain why you did or did not account for them as deferred tax items in Requirement 2.
Comprehensive Colt Company reports pretax financial income of 143,000 in 2019. In addition to pretax income from continuing operations (of which revenues are 295,000), the following items are included in this pretax income: Colts taxable income totals 93,000 in 2019. The difference between the pretax financial income and the taxable income is due to the excess of tax depreciation over financial depreciation on assets used in continuing operations. At the beginning of 2019, Colt had a retained earnings balance of 310.000 and a deferred tax liability of 8,100. During 2019, Colt declared and paid dividends of 48,000. It is subject to tax rates of 15% on the first 50,000 of income and 30% on income in excess of 50,000. Based on proper interperiod tax allocation procedures, Colt has determined that its 2019 ending deferred tax liability is 14,100. Required: 1. Prepare a schedule for Colt to allocate the total 2019 income tax expense to the various components of pretax income. 2. Prepare Colts income tax journal entry at the end of 2019. 3. Prepare Colts 2019 income statement. 4. Prepare Colts 2019 statement of retained earnings. 5. Show the related income tax disclosures on Colts December 31, 2019, balance sheet.
Assume that TDW Corporation ( calendar year-end) has 2022 taxable income of 654,000 for purposes of computing the expense. The company acquired the following assets during 2022MACRS and Computer equipownt In September 12 February 10 2 2,270,400 263,650 3,415,000 a What is the maximum amount of 179 expense may deduct for 20227
ParentCo and SubCo report the following items of income and deduction for the current year. ParentCo's SubCo's Taxable Item Taxable Income Income Income (loss) from operations $100,000 $10,000 (10,000) § 1231 loss Capital gain Charitable contribution 20,000 12,000 1,000 Compute ParentCo and SubCo's current year taxable income or loss computed on a separate basis. ParentCo SubCo a. $81,000 $21,000 b. $81,000 $22,000 C. $70,000 $22,000 d. $70,000 $21,000 0000
ParentCo and SubCo report the following items of income and deduction for the current year Item PC Taxable income SC taxable income income (loss) from operations $ 100,000.00 $ 10,000.00 Section 1231 loss $ (10,000.00) capital gain $ 12,000.00 Charitable contribution $ 20,000.00 $ 1,000.00 compute ParentCo and SubCo's 2022 taxable income or loss computed on a separate basis ParentCo SubCo a $ 81,000.00 $ 22,000.00 b $ 81,000.00 $ 21,000.00 c $ 70,000.00 $ 22,000.00 d $ 70,000.00 $ 21,000.00
Taxable income and pretax financial income would be identical for Cullumber Co. except for its treatments of gross profit on installment sales and estimated costs of warranties. The following income computations have been prepared. Taxable income 2024 2025 2026 Excess of revenues over expenses (excluding two temporary differences) $163,000 $221,000 $94,900 Installment gross profit collected 8,400 8,400 8,400 Expenditures for warranties Taxable income (5,200) (5,200) (5,200) $166,200 $224,200 $98,100 Pretax financial income 2024 2025 2026 Excess of revenues over expenses (excluding two temporary differences) $163,000 $221,000 $94,900 Installment gross profit recognized 25,200 -0- -0- Estimated cost of warranties (15,600) -0- -0- Income before taxes $172,600 $221,000 $94,900 The tax rates in effect are 2024, 20%; 2025 and 2026, 25%. All tax rates were enacted into law on January 1, 2024. No deferred income taxes existed at the beginning of 2024. Taxable income is expected in all future…
Taxable income and pretax financial income would be identical for Blue Co. except for its treatments of gross profit on installment sales and estimated costs of warranties. The following income computations have been prepared. Taxable income 2024 2025 2026 Excess of revenues over expenses (excluding two temporary differences) $154,000 $191.000 $88,100 Installment gross profit collected 8,500 8,500 8,500 Expenditures for warranties Taxable income (4,500) $158,000 (4,500) $195,000 (4,500) $92,100 Pretax financial income 2024 2025 2026 Excess of revenues over expenses (excluding two temporary differences) Installment gross profit recognized $154,000 $191,000 $88,100 25,500 -0- -0- Estimated cost of warranties Income before taxes (13,500) $166,000 -0- -0- $191,000 $88,100 The tax rates in effect are 2024, 20%; 2025 and 2026, 25%. All tax rates were enacted into law on January 1, 2024. No deferred income taxes existed at the beginning of 2024. Taxable income is expected in all future years.…
Recording NOL Carryforward and Carryback|Carryforward Toner Corporation computed the following: Year 1 taxable income, $10,000; Year 2 taxable loss, $( 40,000). At the end of Year 2, Toner made the following estimates: Year 3 taxable income, $4,000; Year 4 taxable income, $11,000; and Year 5 taxable income, $50,000. On the basis of these estimates, Toner believes the full amount of the tax loss carryforward benefit is more likely than not to be realized. There are no other temporary differences. Tax rates are 25% for Year 1, Year 2, and Year 3; and 30% for Year 4 and Year 5. Net operating loss carryforwards can only offset a maximum of 80% of taxable income in each of the future years. Required Do not give solution in image format
Instructions Jefferson Corporation reported the following pretax and taxable income items from 2020: Expenses Gain from the disposal of the discontinued division Income from continuing operations Loss from discontinued division Revenues $65,800 8,000 59,200 (15,900) 125,000 Required: 1. Prepare the journal entries for 2020 to record the intraperiod income tax allocation. The tax rate for the first $30,000 of income is 15%, the tax rate thereafter is 35% 2. Prepare the 2020 income statement for Jefferson Corporation.
S a. What is MSU's interest expense deduction for 2023? $ For 2023, MSU Corporation has $500,000 of adjusted taxable income, $22,000 of business interest income, and $120,000 of business interest expense. It has average annual gross receipts of more than $29,000,000 over the prior three taxable years. b. How much interest expense can be deducted for 2023 if MSU's adjusted taxable income is $300,000?
Part 1XYZ Co. at the end of 2018, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows:Pretax financial income € 750,000Estimated expenses deductible for taxes when paid 1,200,000Extra depreciation (1,350,000)Taxable income € 600,000 Estimated warranty expense of €800,000 will be deductible in 2019, €300,000 in 2020, and €100,000 in 2021. The use of the depreciable assets will result in taxable amounts of €450,000 in each of the next three years. Instructions (a) Prepare a table of future taxable and deductible amounts.(b) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2018, assuming an income tax rate of 40% for all years.
Taxable income and pretax financial income would be identical for Sweet Co. except for its treatments of gross profit on installment sales and estimated costs of warranties. The following income computations have been prepared. Taxable income 2024 2025 2026 Excess of revenues over expenses (excluding two temporary differences) $166,000 $212,000 $97,900 Installment gross profit collected 8,000 8,000 8,000 Expenditures for warranties Taxable income (5,200) (5,200) (5,200) $168,800 $214,800 $100,700 Pretax financial income 2024 2025 2026 Excess of revenues over expenses (excluding two temporary differences) $166,000 $212,000 $97,900 Installment gross profit recognized 24,000 -0- -0- Estimated cost of warranties (15,600) -0- -0- Income before taxes $174,400 $212,000 $97,900 The tax rates in effect are 2024, 20%; 2025 and 2026, 25%. All tax rates were enacted into law on January 1, 2024. No deferred income taxes existed at the beginning of 2024. Taxable income is expected in all future…