Sheridan Inc. reports the following pretax income (loss) for both book and tax purposes. Year 2023 2024 2025 2026 Pretax Income (Loss) $120,000 89,000 (87,000) 120,000 Tax Rate 20% 20% 25% 25%

a. b Below are the taxable profits and losses for the past few years along with the tax rates on income reported for Olive Company. 2025 2026 2027 Income ($275,000) $70,000 $260,000 Tax Rate 20% 20% 20% Olive elects to use the carry forward procedures with no valuation allowance and strongly anticipates future profits to recover losses. Record the tax effect of the above for 2025 Show the income tax section and loss section of the income statement for 2025

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nkt.3

The pretax financial income of x company differs from its taxable income  throughout each of 4 years as follows Year.          Pretax Financial Income.     Taxable income.    Tax rate 2020.            305,000.                               173,000.                35% 2021.             349,000.                               216,000.               20% 2022              358,000                                277,000                20% 2023               429,000                                615,000                20% Pretax fiancial income for each year includes a nondeductible exense of $29,100 (never deductible for tax purposes) The remainder of the difference between pretax fiancial income and taxable income in each period is due to one depreciation temporary difference. No deferred income taxes existed at the beginning of 2020. Prepare journal entries to record income taxes in all 4 years. Assume that the change in the tax rate to 20% was not enacted until the beginning of 2021

Pp3

Exercise 19.8 (Two Temporary Differences, One rate, 3 years). Button Company has the following two temporary differences between its income tax expense and income taxes payable.     2020 2021 2022 Pretax Financial Income $840,000 $910,000 $945,000 Excess Depreciation Expense on tax Return (30,000) (40,000) (10,000) Excess Warranty Expense in Financial Income 20,000 10,000 8,000 Taxable Income $830,000 $880,000 $943,000   The income tax rate is 20% for all years.   Instructions:   a) Assuming there were no temporary differences prior to 2020, prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020,2021, and 2022.   b) Indicate how deferred taxes will be reported on the 2022 balance sheet. Button’s product warranty is for 12 months.       Deferred tax asset ( $ 0 + $ 0 + $ 0 )..............................$ 0       Deferred tax liability ( $ 0 + $ 0 + $ 0…

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Marty has the following net § 1231 results for each of the years shown: Tax Year 2017 2018 2019 2020 Net § 1231 Loss $10,000 3,000 12,000 Net § 1231 Gain What would be the nature of the net gains in 2020? $29,000

Wildhorse Company has the following two temporary differences between its income tax expense and income taxes payable. 2025 2026 2027 Pretax financial income $820,000 $927,000 $912,000 Excess depreciation expense on tax return (28,700) (42,000) (9,700) Excess warranty expense in financial income Taxable income 20,100 10,400 7,800 $811,400 $895,400 $910,100 The income tax rate for all years is 20%. (a) Your answer is partially correct. Assuming there were no temporary differences prior to 2025, prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2025, 2026, and 2027. (List all debit entries before credit entries. 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. Record journal entries in the order presented in the problem.)