FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Grouper Company reports pretax financial income of $68,400 for 2020. The following items cause taxable income to be different than pretax financial income.
Grouper’s tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are nodeferred taxes at the beginning of 2020.
| 1. | ||
| 2. | Rent collected on the tax return is greater than rent recognized on the income statement by $21,000. | |
| 3. | Fines for pollution appear as an expense of $10,300 on the income statement. |
Grouper’s tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no
(a)
Compute taxable income and income taxes payable for 2020.
| Taxable income |
$enter a dollar amount
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|---|---|---|
| Income taxes payable |
$enter a dollar amount
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(b)
Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
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Account Titles and Explanation
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Debit
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Credit
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enter an account title
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enter a debit amount
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enter a credit amount
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enter an account title
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enter a debit amount
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enter a credit amount
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enter an account title
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enter a debit amount
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enter a credit amount
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enter an account title
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enter a debit amount
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enter a credit amount
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(c)
Prepare the income tax expense section of the income statement for 2020, beginning with the line “Income before income taxes.” (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
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Grouper Company
Income Statement (Partial) choose the accounting period |
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select an income statement item
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$enter a dollar amount
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select an opening section name
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select an income statement item
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$enter a dollar amount
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select an income statement item
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enter a dollar amount
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enter a subtotal of the two previous amounts
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select a closing name for this statement
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$enter a total net income or loss amount
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(d)
Compute the effective income tax rate for 2020. (Round answer to 1 decimal places, e.g. 25.5%.)
| Effective income tax rate |
enter the Effective income tax rate in percentages rounded to 1 decimal place
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% |
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