STEPS to Calculate the Federal Income Tax and Federal Income Tax Adjustment: Notice, there are no tax adjustments on this worksheet. 1. Calculate the actual Net Income before Federal Income Tax Expense: ver Income Statement CREDIT column total: Less Income Statement DEBIT column total: Plus Federal Income Tax Expense already paid: Hint: it's not 70,945 Total Net Income Before Federal Income Tax: 2. Determine the tax bracket from the Tax Rate Table using Net Income Before Federal Tax amount for 1 above: DO Over: But not over: D0 3. Based on the tax bracket identified the correct tax is: 4. Calculate the total Federal Income Tax expected using the Tax Rate Table information identified in step 3. 5. Calculate the Federal Income Tax Adjustment to ensure the company pays the required taxes. The total Federal Income Tax calculated in 4 above: Minus estimated Federal Income Tax Expense already paid: The adjustment for Federal Income Tax Expense: To complete the Federal Income Tax adjustment on the worksheet, GO to the second sheet called: WorksheetWFederalTaxAdj. 88 8 8 8

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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Question
Use the steps to calculate the federal income tax. I’m not sure if your able to zoom in but I hope you are.
8,500.00
8,500.00
8,500.00
40
17,000.00
17,000.00
17,000.00
41
105,000.00
105,000.00
105,000.00
42
2,900.00
2,900.00
2,900.00
43
3,000.00
3,000.00
3,000.00
44
1,000.00
1,000.00
1,000.00
45
3,500.00
3,500.00
3,500.00
46
6,000.00
6,000.00
6,000,00
47
592,835.00
592,835.00
36,950.00
36,950.00
604,885.00
604,885.00
359,135.00
430,080.00
245,750.00
174,805.00
48
70,945.00
70,945.00
49
430,080.00
430,080.00
245,750.00
245,750.00
50
51
Tax Rate schedule from: https://www.irs.gov/pub/irs-pdf/i1120.pdf
Tax Rate Table
STEPS to Calculate the Federal Income Tax and Federal Income Tax Adjustment: Notice, there are no tax adjustments on this worksheet.
If taxable income is:
1. Calculate the actual Net Income before Federal Income Tax Expense:
But not over
Of the amount over
Income Statement CREDIT column total:
Over
Таx is
$0
$50,000
15%
$0
Less Income Statement DEBIT column total:
50,000
75,000 $7,500 + 25%
50,000
Plus Federal Income Tax Expense already paid:
Total Net Income Before Federal Income Tax:
Hint: it's not 70,945
75,000
100,000 13,750 + 34%
75,000
100,000
335,000 22,250 + 39%
100,000
335,000
2. Determine the tax bracket from the Tax Rate Table using Net Income Before Federal Tax amount for1 above:
335,000
10,000,000 113,900 + 34%
But not over:
10,000,000 15,000,000 400,000 + 35%
15,000,000 18,333,333 150,000 + 38%
10,000,000
Over:
15,000,000
35%
3. Based on the tax bracket identified the correct tax is:
18,333,333
4. Calculate the total Federal Income Tax expected using the Tax Rate Table information identified in step 3
5. Calculate the Federal Income Tax Adjustment to ensure the company pays the required taxes.
The total Federal Income Tax calculated in 4 above:
Minus estimated Federal Income Tax Expense already paid:
The adjustment for Federal Income Tax Expense:
To complete the Federal Income Tax adjustment on the worksheet, GO to the second sheet called: WorksheetWFederal TaxAdj.
Transcribed Image Text:8,500.00 8,500.00 8,500.00 40 17,000.00 17,000.00 17,000.00 41 105,000.00 105,000.00 105,000.00 42 2,900.00 2,900.00 2,900.00 43 3,000.00 3,000.00 3,000.00 44 1,000.00 1,000.00 1,000.00 45 3,500.00 3,500.00 3,500.00 46 6,000.00 6,000.00 6,000,00 47 592,835.00 592,835.00 36,950.00 36,950.00 604,885.00 604,885.00 359,135.00 430,080.00 245,750.00 174,805.00 48 70,945.00 70,945.00 49 430,080.00 430,080.00 245,750.00 245,750.00 50 51 Tax Rate schedule from: https://www.irs.gov/pub/irs-pdf/i1120.pdf Tax Rate Table STEPS to Calculate the Federal Income Tax and Federal Income Tax Adjustment: Notice, there are no tax adjustments on this worksheet. If taxable income is: 1. Calculate the actual Net Income before Federal Income Tax Expense: But not over Of the amount over Income Statement CREDIT column total: Over Таx is $0 $50,000 15% $0 Less Income Statement DEBIT column total: 50,000 75,000 $7,500 + 25% 50,000 Plus Federal Income Tax Expense already paid: Total Net Income Before Federal Income Tax: Hint: it's not 70,945 75,000 100,000 13,750 + 34% 75,000 100,000 335,000 22,250 + 39% 100,000 335,000 2. Determine the tax bracket from the Tax Rate Table using Net Income Before Federal Tax amount for1 above: 335,000 10,000,000 113,900 + 34% But not over: 10,000,000 15,000,000 400,000 + 35% 15,000,000 18,333,333 150,000 + 38% 10,000,000 Over: 15,000,000 35% 3. Based on the tax bracket identified the correct tax is: 18,333,333 4. Calculate the total Federal Income Tax expected using the Tax Rate Table information identified in step 3 5. Calculate the Federal Income Tax Adjustment to ensure the company pays the required taxes. The total Federal Income Tax calculated in 4 above: Minus estimated Federal Income Tax Expense already paid: The adjustment for Federal Income Tax Expense: To complete the Federal Income Tax adjustment on the worksheet, GO to the second sheet called: WorksheetWFederal TaxAdj.
K
ADJUSTED TRIAL BALANCE
CREDIT
INCOME STATEMENT
DEBIT
BALANCE SHEET
DEBIT
ADJUSTMENTS
TRIAL BALANCE
CREDIT
ACCOUNT TITLE
DEBIT
DEBIT
CREDIT
DEBIT
CREDIT
CREDIT
7.
1Cash
28.000 00
28,000.00
28,000.00
350.00
350.00
350.00
Petty Cash
Accounts Receivable
2
1.500 00
1,500.00
1.500 00
10
150.00
1,000.00
1,150.00
1,150.00 4
11
4 Allowance for Uncollectible Accounts
12
5 Merchandise Inventory
140.000.00
14.500.00
125,500.00
125.500.00
600.00
16
3.500 00
3,800. 00
2.900.00
600.00
6 Supplics-Office
7 Supplies-Store
8 Prepaid Insurance
9Office Equipment
10 Accumulated Depreciation-Office Equipment
13
n Stors
3,000.00
800.00
800.00
7.
14
15
5.500.00
4.500.00
1.000.00
1.000.00
8.
30.000.00
30.000.00
30.000.00
9.
16
5,900.00
I1,700.00
11,700.00 10
17
5,800.00
38.000.00
38.000.00
38.000.00
11
18.
11 Store Equinment
t
12 Accumulated Depreciation-Store Equipment
5,000.00
5,150.00
10,150.00
10,150.00 12
19
12,000.00
12.000.00 13
20
13 Accounts Payable
12,000.00
21
14 Emplovee Income Tax Pavble
700.00
700.00
700.00
14
22
15
15 Federal Income Tax Payable
23
1.350.00
1350.00
1.350.00 16
16 Social Security Tax Payable
24
17 Medicare Tax Pavable
350.00
350.00
350.00
17
25
2.250 00
2.250.00 18
2.250.00
18 Sales Tax Payable
30.00
30.00 19
26
19 Unemplovment Tax Pavable-Federal
30.00
27
20 Unemployment Tax Payable-State
225.00
225.00 20
225.00
28
21 Health Insurance Premiums Payable
1,200.00
1,200.00
1.200.00 21
29
22 Dividends Payable
5,200.00
5.200 00
5,200.00 22
118,000.00
118.000.00 23
30
23 Capital Stock
118.000.00
31
24 Retained Eamines
10.500.00
10,500.00
10,500.00 24
32
25 Dividends
20.000.00
20.000.00
20.000.00
25
33
26 Income Summary
14.500 00
14.500.00
14.500.00
26
34
27 Sales
425,000.00
425.000.00
425,000.00
27
35
350.00
350.00
28
28 Sales Discount
29 Sales Returns and Allowances
350.00
36
2.800 00
2,800.00
2,800.00
29
37
168.285.00
168.285.00
30
31
30 Purchases
168.285.00
38
31 Purchases Discount
1.480.00
1,480.00
1.480.00
39
3.600.00
3.600.00
32 Purchases Returns and Allowances
33 Advertising Expenses
32
33
3.600.00
40
3,250.00
3,250.00
3,250.00
41
34 Cash Short and Over
1.500.00
1.500.00
1.500.00
34
35
36
37
38
42
35 Credit Card Fee Expense
3,400.00
3,400.00
3,400.00
43
36 Depreciation Expense-Office Equipment
37 Depreciation Expense-Store Equipment
5.900.00
5.900.00
5.900.00
44
5,150.00
5,150.00
5,150.00
45
38 Insurance Expense
4,500.00
4.500.00
4,500.00
46
39 Miscellancous Expense
2.600.00
2,600.00
2,600.00
39
47
40 Payroll Taxcs Expense
8.500.00
8,500.00
8,500.00
40
48
41
42
41 Rent Expensc
17.000.00
17.000.00
17.000.00
49
42 Salary Expense
105.000.00
105,000.00
105,000.00
50
43 Supplics ExRense-Office
51
44 Supplies Expense--Store
2.900.00
2.900.00
2.900.00
43
3,000.00
3,000.00
3,000.00
44
52
45 Uncollectible Accounts Expense
46 Uilities Expense
1000 00
1O00.00
1.000.00
45
53
3.500.00
3.500.00
3.500.00
46
46
54
47 Federal Income Tax Expense
6,000.00
6,000.00
6,000.00
47
7
55
48 Totals
592.835.00
592.835.00
36.950.00
36.950.00
604,885.00
604,885.00
359.135 00
430.080.00
245.750 00
174.805.00 48
56
70,945.00 49
245,750.00 50
49 Net Income BEFORE Federal Income Tax
70,945.00
57
50
430,080.00
430,080.00
245,750.00
台灣
Transcribed Image Text:K ADJUSTED TRIAL BALANCE CREDIT INCOME STATEMENT DEBIT BALANCE SHEET DEBIT ADJUSTMENTS TRIAL BALANCE CREDIT ACCOUNT TITLE DEBIT DEBIT CREDIT DEBIT CREDIT CREDIT 7. 1Cash 28.000 00 28,000.00 28,000.00 350.00 350.00 350.00 Petty Cash Accounts Receivable 2 1.500 00 1,500.00 1.500 00 10 150.00 1,000.00 1,150.00 1,150.00 4 11 4 Allowance for Uncollectible Accounts 12 5 Merchandise Inventory 140.000.00 14.500.00 125,500.00 125.500.00 600.00 16 3.500 00 3,800. 00 2.900.00 600.00 6 Supplics-Office 7 Supplies-Store 8 Prepaid Insurance 9Office Equipment 10 Accumulated Depreciation-Office Equipment 13 n Stors 3,000.00 800.00 800.00 7. 14 15 5.500.00 4.500.00 1.000.00 1.000.00 8. 30.000.00 30.000.00 30.000.00 9. 16 5,900.00 I1,700.00 11,700.00 10 17 5,800.00 38.000.00 38.000.00 38.000.00 11 18. 11 Store Equinment t 12 Accumulated Depreciation-Store Equipment 5,000.00 5,150.00 10,150.00 10,150.00 12 19 12,000.00 12.000.00 13 20 13 Accounts Payable 12,000.00 21 14 Emplovee Income Tax Pavble 700.00 700.00 700.00 14 22 15 15 Federal Income Tax Payable 23 1.350.00 1350.00 1.350.00 16 16 Social Security Tax Payable 24 17 Medicare Tax Pavable 350.00 350.00 350.00 17 25 2.250 00 2.250.00 18 2.250.00 18 Sales Tax Payable 30.00 30.00 19 26 19 Unemplovment Tax Pavable-Federal 30.00 27 20 Unemployment Tax Payable-State 225.00 225.00 20 225.00 28 21 Health Insurance Premiums Payable 1,200.00 1,200.00 1.200.00 21 29 22 Dividends Payable 5,200.00 5.200 00 5,200.00 22 118,000.00 118.000.00 23 30 23 Capital Stock 118.000.00 31 24 Retained Eamines 10.500.00 10,500.00 10,500.00 24 32 25 Dividends 20.000.00 20.000.00 20.000.00 25 33 26 Income Summary 14.500 00 14.500.00 14.500.00 26 34 27 Sales 425,000.00 425.000.00 425,000.00 27 35 350.00 350.00 28 28 Sales Discount 29 Sales Returns and Allowances 350.00 36 2.800 00 2,800.00 2,800.00 29 37 168.285.00 168.285.00 30 31 30 Purchases 168.285.00 38 31 Purchases Discount 1.480.00 1,480.00 1.480.00 39 3.600.00 3.600.00 32 Purchases Returns and Allowances 33 Advertising Expenses 32 33 3.600.00 40 3,250.00 3,250.00 3,250.00 41 34 Cash Short and Over 1.500.00 1.500.00 1.500.00 34 35 36 37 38 42 35 Credit Card Fee Expense 3,400.00 3,400.00 3,400.00 43 36 Depreciation Expense-Office Equipment 37 Depreciation Expense-Store Equipment 5.900.00 5.900.00 5.900.00 44 5,150.00 5,150.00 5,150.00 45 38 Insurance Expense 4,500.00 4.500.00 4,500.00 46 39 Miscellancous Expense 2.600.00 2,600.00 2,600.00 39 47 40 Payroll Taxcs Expense 8.500.00 8,500.00 8,500.00 40 48 41 42 41 Rent Expensc 17.000.00 17.000.00 17.000.00 49 42 Salary Expense 105.000.00 105,000.00 105,000.00 50 43 Supplics ExRense-Office 51 44 Supplies Expense--Store 2.900.00 2.900.00 2.900.00 43 3,000.00 3,000.00 3,000.00 44 52 45 Uncollectible Accounts Expense 46 Uilities Expense 1000 00 1O00.00 1.000.00 45 53 3.500.00 3.500.00 3.500.00 46 46 54 47 Federal Income Tax Expense 6,000.00 6,000.00 6,000.00 47 7 55 48 Totals 592.835.00 592.835.00 36.950.00 36.950.00 604,885.00 604,885.00 359.135 00 430.080.00 245.750 00 174.805.00 48 56 70,945.00 49 245,750.00 50 49 Net Income BEFORE Federal Income Tax 70,945.00 57 50 430,080.00 430,080.00 245,750.00 台灣
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