rr Blossom Inc. has two temporary differences at the end of 2024. The first difference stems from installment sales, and the second oneresults from the accrual of a loss contingency, Blossom's accounting department has developed a schedule of future taxable anddeductible amounts related to these temporary differences as follows.Taxable amountsDeductible amounts(a)202520262027$37.100 $45,500$64,100(13.600)(20,400)$37,100 $31,900 $43,700As of the beginning of 2024, the enacted tax rate is 34% for 2024 and 2025, and 20% for 2026-2029. At the beginning of 2024, thecompany had no deferred income taxes on its balance sheet. Taxable income for 2024 is $471,000 Taxable income is expected in allfuture years.Deferred To AssetIncome Tax ParalPrepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2024 (List all debitentries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry isrequired, select "No Entry for the account titles and enter for the amounts)Account Titles and ExplanationIncome Tax ExperDeferred Tax LabiliSearch2028$75,70011$75,70099DebitCredit

Taxable income: It is the income calculated as per the tax laws and on which the applicable tax…

THL has YW temporary differences at the end of 2024. The first di esults from the accrual of a loss contingency Blossom's accounting depart deductible amounts related to these temporary differences as follows. Taxable amounts Deductible amounts 2025 $37.100 $45.500 2026 2027 $64,100 (13,600) (20,400) $43,700 $37,100 $31.900 2028 $75,700 $75,700

THL has YW temporary differences at the end of 2024. The first di esults from the accrual of a loss contingency Blossom's accounting depart deductible amounts related to these temporary differences as follows. Taxable amounts Deductible amounts 2025 $37.100 $45.500 2026 2027 $64,100 (13,600) (20,400) $43,700 $37,100 $31.900 2028 $75,700 $75,700

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 10E: Multiple Temporary Differences Vickers Company reports taxable income of 4,500 for 2019. Vickers has...

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Bridgeport Inc. has two temporary differences at the end of 2019. The first difference stems from installment sales, and the second one results from the accrual of a loss contingency. Bridgeport’s accounting department has developed a schedule of future taxable and deductible amounts related to these temporary differences as follows. 2020 2021 2022 2023 Taxable amounts $41,300 $50,000 $61,200 $72,600 Deductible amounts (14,000 ) (18,300 ) $41,300 $36,000 $42,900 $72,600 As of the beginning of 2019, the enacted tax rate is 34% for 2019 and 2020, and 20% for 2021–2024. At the beginning of 2019, the company had no deferred income taxes on its balance sheet. Taxable income for 2019 is $548,000. Taxable income is expected in all future years. (a) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2019. (Credit account…
Nadal Inc. has two temporary differences at the end of 2019. The first difference stems from installment sales, and the second one results from the accrual of a loss contingency. Nadal's accounting department has developed a schedule of future taxable and deductible amounts related to these temporary differences as follows. 00202000 00202100 00202200 00202300 Taxable amounts $40,000) $50,000) $60,000) $80,000) Deductible amounts 0000000) 0(15,000) 0(19,000) 0000000) $40,000) $35,000) $41,000) $80,000) As of the beginning of 2019, the enacted tax rate is 34% for 2019 and 2020, and 20% for 2021–2024. At the beginning of 2019, the company had no deferred income taxes on its balance sheet. Taxable income for 2019 is $500,000. Taxable income is expected in all future years. Instructions a. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2019. b. Indicate how deferred income…
(Two Temporary Differences, Multiple Rates, Future Taxable Income) Nadal Inc. has two temporary differences at the end of 2016. The first difference stems from installment sales, and the second one results from the accrual of aloss contingency. Nadal’s accounting department has developed a schedule of future taxable and deductible amounts related to these temporary differences as follows. 2017 2018 2019 2020 Taxable amounts $40,000 $50,000 $60,000 $80,000 Deductible amounts (15,000) (19,000) $40,000 $35,000 $41,000 $80,000 As of the beginning of 2016, the enacted tax rate is 34% for 2016 and 2017, and 38% for 2018–2021. At the beginning of 2016, the company had no deferred income taxes on its balance sheet. Taxable income for 2016 is $500,000. Taxable income is expected in all future years.Instructions(a) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2016.(b) Indicate how deferred income taxes would be…
E18-10 Multiple Temporary Differences Vickers Company reports taxable income of $4,500 for 2019. Vickers has two temporary differences between pretax financial income and taxable income at the end of 2019. The first difference is expected to result in taxable amounts totaling $2,470 in future years. The second difference is expected to result in deductible amounts totaling $1,360 in future years. Vickers has a deferred tax asset of $372 and a deferred tax liability of $690 at the beginning of 2019. The current tax rate is 30%, and no change in the tax rate has been enacted for future years. Vickers has positive, verifiable evidence of future taxable income. Required: Prepare Vickers’s income tax journal entry at the end of 2019.
The information that follows pertains to Esther Food Products: a. At December 31, 2024, temporary differences were associated with the following future taxable (deductible) amounts: Depreciation Prepaid expenses Warranty expenses $ 52,000 22,000 (19,000) b. No temporary differences existed at the beginning of 2024. c. Pretax accounting income was $74,000 and taxable income was $19,000 for the year ended December 31, 2024. d. The tax rate is 25%. Required: Complete the following table given below and prepare the appropriate journal entry to record income taxes for 2024. Complete this question by entering your answers in the tabs below. Calculation General Journal Complete the following table given below to record income taxes for 2024. Note: Amounts to be deducted should be entered with a minus sign. Description Pretax accounting income Permanent differences Income subject to taxation Temporary Differences Income taxable in current year Calculation General Journal Amount Tax Rate $…
The information that follows pertains to Esther Food Products: a. At December 31, 2024, temporary differences were associated with the following future taxable (deductible) amounts: Depreciation Prepaid expenses Warranty expenses b. No temporary differences existed at the beginning of 2024. c. Pretax accounting income was $46,000 and taxable income was $9,000 for the year ended December 31, 2024. d. The tax rate is 25%. Required: Complete the following table given below and prepare the appropriate journal entry to record income taxes for 2024. Complete this question by entering your answers in the tabs below. Calculation General Journal $ 32,000 11,000 (6,000) Complete the following table given below to record income taxes for 2024. Note: Amounts to be deducted should be entered with a minus sign. Description Pretax accounting income Permanent differences Income subject to taxation Temporary Differences Income taxable in current year $ Amount 46,000 X Tax Rate = x X Recorded as:
E18.19 (LO 1, 2, 4) (Two Temporary Differences, Multiple Rates, Future Taxable Income) Nadal Inc. has two temporary differences at the end of 2024. The first difference stems from installment sales, and the second one results from the accrual of a loss contingency. Nadal's accounting department has developed a schedule of future taxable and deductible amounts related to these temporary differences as follows. Taxable amounts 2025 2026 2027 2028 $40,000 $50,000 $60,000 $80,000 (15,000) (19,000) Deductible amounts $40,000 $35,000 $41,000 $80,000 As of the beginning of 2024, the enacted tax rate is 34% for 2024 and 2025, and 20% for 2026-2029. At the beginning of 2024, the company had no deferred income taxes on its balance sheet. Taxable income for 2024 is $500,000. Taxable income is expected in all future years. Instructions a. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2024. b. Indicate how deferred income taxes would be…
10. Sheridan Corp. prepared the following reconciliation of income per books with income per tax return for the year ended December 31, 2021: Book income before income taxes $ 2630000 Add temporary difference Construction contract revenue which will reverse in 2022 233000 Deduct temporary difference Depreciation expense which will reverse in equal amounts in each of the next four years ( 943200) Taxable income $ 1919800 Sheridan's effective income tax rate is 25% for 2021. What amount should Sheridanreport in its 2021 income statement as the current provision for income taxes? A) $ 479950 B) $ 657500 C) $ 715750 D) $ 58250
Presented below are two independent situations related to future taxable and deductible amounts resulting from temporary differences existing at December 31, 2020. 1. Mooney Co. has developed the following schedule of future taxable and deductible amounts. 2021 2022 2023 2024 2025 Taxable amounts $300 $300 $300 $ 300 $300 Deductible amount — — — (1,600) — 2. Roesch Co. has the following schedule of future taxable and deductible amounts. 2021 2022 2023 2024 Taxable amounts $300 $300 $ 300 $300 Deductible amount — — (2,300) — Both Mooney Co. and Roesch Co. have taxable income of $4,000 in 2020 and expect to have taxable income in all future years. The tax rates enacted as of the beginning of 2020 are 30% for 2020–2023 and 35% for years thereafter. All of the underlying temporary differences relate to noncurrent assets and liabilities. Instructions For each of these two situations, compute the net amount of deferred income taxes to be reported at the end of…
Sarsuela Co. at the end of 2022, its first year of operation, prepared reconciliation between pretax financial income and taxable income as follows: Pretax financial income P400,000 Estimated litigation expense 1,000,000 Installment sales (800,000) Taxable income P600,000 The estimated litigation expenses of P1,000,000 will be deductible in 2023 when it is expected to be paid. The gross profit from installment sales will be realized in the amount of P500,000 and P300,000 each of the next two years. The income tax rate is 30% in current year and 32% in 2023 and 33% in 2024 were enacted for future years. TRUE OR FALSE Statement 1: The net income after tax for the period ending December 31, 2022 is P660,000. Statement 2: Total income tax expense for the period ending December 31, 2022 is P120,000
Taxable income and pretax financial income would be identical for Blue Co. except for its treatments of gross profit on installment sales and estimated costs of warranties. The following income computations have been prepared. Taxable income 2024 2025 2026 Excess of revenues over expenses (excluding two temporary differences) $154,000 $191.000 $88,100 Installment gross profit collected 8,500 8,500 8,500 Expenditures for warranties Taxable income (4,500) $158,000 (4,500) $195,000 (4,500) $92,100 Pretax financial income 2024 2025 2026 Excess of revenues over expenses (excluding two temporary differences) Installment gross profit recognized $154,000 $191,000 $88,100 25,500 -0- -0- Estimated cost of warranties Income before taxes (13,500) $166,000 -0- -0- $191,000 $88,100 The tax rates in effect are 2024, 20%; 2025 and 2026, 25%. All tax rates were enacted into law on January 1, 2024. No deferred income taxes existed at the beginning of 2024. Taxable income is expected in all future years.…
Taxable income and pretax financial income would be identical for Cullumber Co. except for its treatments of gross profit on installment sales and estimated costs of warranties. The following income computations have been prepared. Taxable income 2024 2025 2026 Excess of revenues over expenses (excluding two temporary differences) $163,000 $221,000 $94,900 Installment gross profit collected 8,400 8,400 8,400 Expenditures for warranties Taxable income (5,200) (5,200) (5,200) $166,200 $224,200 $98,100 Pretax financial income 2024 2025 2026 Excess of revenues over expenses (excluding two temporary differences) $163,000 $221,000 $94,900 Installment gross profit recognized 25,200 -0- -0- Estimated cost of warranties (15,600) -0- -0- Income before taxes $172,600 $221,000 $94,900 The tax rates in effect are 2024, 20%; 2025 and 2026, 25%. All tax rates were enacted into law on January 1, 2024. No deferred income taxes existed at the beginning of 2024. Taxable income is expected in all future…