The following information relates to Sandhill Corporation's transactions during 2023, its first year of operations. 1. 2. 3. 4. 5. 6. Income before income tax on the income statement for 2023 was $56,000. Income before income tax ($56,000 above) is net of a loss due to the writedown of land of $48,000. Sandhill reported a tax-deductible financing charge of $6,300 on its 2023 statement of retained earnings. The charge is for interest on a financial instrument that is legally debt, but in substance is equity for financial reporting purposes. The tax rate enacted for 2023 and future years is 30%. Because this was Sandhill's first taxation year, no instalments on account of income taxes were required or paid by Sandhill. Differences between the 2023 GAAP amounts and their treatment for tax purposes were as follows: a. Warranty expense accrued for financial reporting purposes amounted to $16,000. Warranty payments deducted for taxes amounted to $12,800. Warranty liabilities were classified as current on the SFP. b. Of the loss on writedown of land of $48,000, 25% will never be tax-deductible. The remaining 75% will be deductible for tax purposes evenly over the years from 2024 to 2026. The loss relates to the loss in value of company land due to contamination. (a) c. Gross profit on construction contracts using the percentage-of-completion method for book purposes amounted to $30,600. For tax purposes, gross profit on construction contracts amounted to $0 because the completed-contract method is used and no contracts were completed during the year. Construction costs amounted to $257,000 during the year. Show Transcribed Text d. Depreciation of property, plant, and equipment for financial reporting purposes amounted to $58,200. CCA charged on the tax return amounted to $77,600. The related property, plant, and equipment cost $291,000 when it was acquired early in 2023. e. A $3,400 fine paid for a violation of pollution laws was deducted in calculating accounting income. f. Dividend revenue earned on an investment was tax exempt and amounted to $1,500. Taxable income is expected for the next few years. Sandhill follows IFRS. Show Transcribed Text Your answer is partially correct. Deferred tax liability S Calculate Sandhill's deferred tax asset or liability at December 31, 2023. $ C

The following information is available for Oriole Corporation for 2025. 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $118,000. This difference will reverse in equal amounts of $29,500 over the years 2026-2029. 2. Interest received on municipal bonds was $10,000. 3. Rent collected in advance on January 1, 2025, totaled $58,800 for a 3-year period. Of this amount, $39,200 was reported as unearned at December 31, 2025, for book purposes. 4. The tax rates are 20% for 2025 and 17% for 2026 and subsequent years. 5. Income taxes of $173,000 are due per the tax return for 2025. 6. No deferred taxes existed at the beginning of 2025. Compute taxable income for 2025. Taxable income for 2025 $ Compute pretax financial income for 2025. Pretax financial income for 2025 $ 865000 953800 Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2025 and 2026. Assume taxable income was $365,000 in…

The following information is available for Oriole Corporation for 2025. 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $118,000. This difference will reverse in equal amounts of $29,500 over the years 2026-2029. 2. Interest received on municipal bonds was $10,000. 3. Rent collected in advance on January 1, 2025, totaled $58,800 for a 3-year period. Of this amount, $39,200 was reported as unearned at December 31, 2025, for book purposes. 4. The tax rates are 20% for 2025 and 17% for 2026 and subsequent years. 5. Income taxes of $173,000 are due per the tax return for 2025. 6. No deferred taxes existed at the beginning of 2025. Compute taxable income for 2025. Taxable income for 2025 $ Compute pretax financial income for 2025. Pretax financial income for 2025 $ 865000 953800 Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2025 and 2026. Assume taxable income was $365,000 in…

In 2023, Novak Inc. reported pretax accounting income of $129,100. In 2024, the company had a pretax accounting income of $57,100. In 2025, the company had pretax losses of $205,800. The following year, the company's pretax accounting income was $169,600. Income for tax purposes was the same as for accounting for all years. Novak's tax rate was 25% for 2023 and 2024, 28% for 2025 and 26% for 2026 and subsequent years. The tax rates were all enacted by the beginning of 2023. Prepare the journal entries for the years 2023 to 2026 to record income taxes. Assume that Novak's policy is to carry back any tax losses first, and that at the end of 2025, the loss carryforward benefits are judged more likely than not to be realized in the future. Novak follows IFRS. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order…