Sandhill Company has the following cumulative taxable temporary differences: 12/31/21 12/31/20 $2000000 $2650000 The tax rate enacted for 2021 is 30%, while the tax rate enacted for future years is 20%. Taxable income for 2021 is $4800000 and there are no permanent differences. Sandhill’s pretax financial income for 2021 is:

Sandhill Company has the following cumulative taxable temporary differences: 12/31/21 12/31/20 $2000000 $2650000 The tax rate enacted for 2021 is 30%, while the tax rate enacted for future years is 20%. Taxable income for 2021 is $4800000 and there are no permanent differences. Sandhill’s pretax financial income for 2021 is:

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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Grace Corporation's pretax fınancial income is $600,000 and taxable income is $550,000 for year 2020. Its beginning deferred tax liability account has a balance of $75,000. Its cumulative temporary differences for year-end 2020 is equal to $300,000 and will reverse and result in taxable amounts as follows: Year Таxable Amount $100,000 $ 75,000 $125,000 The tax rate is 30% for all 2021 2022 2023 years.
Shwonson Industries reported a deferred tax asset of $775 million for the year ended December 31, 2020, related to a temporary difference of $31 million. The tax rate was 25%. The temporary difference is expected to reverse in 2022, at which time the deferred tax asset will reduce taxable income. There are no other temporary differences in 2020-2022. Assume a new tax law is enacted in 2021 that causes the tax rate to change from 25% to 15% beginning in 2022. (The rate remains 25% for 2021 taxes.) Taxable income in 2021 is $41 million. Required: 1. Prepare the appropriate journal entry to record Shwonson's income tax expense in 2021. 2. What effect, will enacting the change in the 2022 tax rate, have on Shwonson's 2021 net income? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the appropriate journal entry to record Shwonson's income tax expense in 2021. (If no entry is required for a transaction/event, select "No journal entry required"…
Force Corporation has one temporary difference at the end of 2020 that will reverse and cause taxable amounts of $36,000 in 2021, $45,500 in 2022, and $50,000 in 2023. Force's pretax financial income for 2020 is $196,000, and the tax rate is 30% for all years. There are no deferred taxes at the beginning of 2020. 1. Compute taxable income and income taxes payable for 2020. 2. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020.
The ABC Company has determined that its taxable income for the year 2021 is P3,000,000. The following related facts were gathered (Income tax rate for current and future years is 30%): Cumulative temporary differences, 12/31/2021Taxable temporary differences- P1,480,000Deductible temporary differences- P750,000 Permanent differences:Non-taxable revenue- P200,000Non-deductible expenses- P600,000 Deferred tax asset, December 31, 2020- P150,000Deferred tax liability, December 31, 2020- P300,000 How much is the total income tax expense (current and deferred) for the year 2021? A.P969,000 B.P900,000 C.P831,000 D.P813,000
Omskirt Company reported an excess of warranty expense over warranty deductions of P720,000 for the year ended December 31, 2019. This temporary difference will reverse in equal amounts over the years 2020 through 2022. The enacted tax rates are as follows: 2019 - 30% 2020 - 32% 2021 - 34% 2022 - 36% The reporting for this temporary difference at December 31, 2019 would be: a. deferred tax liability of P216,000. b. deferred tax asset of P244,800. c. deferred tax liability of P244,800. d. deferred tax asset of P216,000.
The following information is taken from Igado Company’s 2020 financial records: Pretax accounting income- P1,500,000 Accrued warranty in excess of actual warranty expenditures- P24,500 Excess tax depreciation- P45,000 Taxable income- P1,479,500 The temporary differences were created entirely in 2020. The future deductible amount is expected to reverse in 2021 and the future taxable amount will reverse in equal amounts in the next three years. Tax rates are: 30% in 2020; 32% in 2021; 34% in 2022 and 35% in 2023. How much should Igado Company report as deferred tax asset and deferred tax liability, respectively, at December 31, 2020? A. P7,840 and P14,400 B. P7,350 and P15,150 C. P7,350 and P14,400 D. P7,840 and P15,150
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Apple Corporation prepared the following reconciliation for its first year of operations: Pretax financial income for 2020- P1,200,000 - Tax exempt interest - P100,000 - Taxable temporary difference - P300,000 The temporary difference will reverse evenly over the next two years at an enacted tax rate of 40%. The enacted tax rate for 2020 is 28%. What amount should be reported in its 2020 income statement as the current portion of its provision for income taxes? A.P480,000B.P320,000C.P224,000D.P336,000
Sheridan Corporation reported $230000 in revenues in its 2021 financial statements, of which $91100 will not be included in the tax return until 2022. The enacted tax rate is 40% for 2021 and 35% for 2022. What amount should Sheridan report for deferred income tax liability in its balance sheet at December 31, 2021? O $55560 O $48615 O $36440 O $31885
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