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- A reduction in the statutory tax rate would most likely benefi t the company’s:A . income statement and balance sheet.B . income statement but not the balance sheet.C . balance sheet but not the income statement.analyze disclosures relating to deferred tax items and the eff ective tax rate reconciliation,and explain how information included in these disclosures aff ects a company’s fi nancialstatements and fi nancial ratios;Which of the following is deducted from the financial income in computing for the taxable income? Excess of accounting depreciation from the allowed tax deduction Donations received during the year Penalties paid for late filing of tax returns Unrealized losses from FA@FVTOCI
- explain how deferred tax liabilities and assets are created and the factors that determine howa company’s deferred tax liabilities and assets should be treated for the purposes of fi nancialanalysis;Justification for the method of determining periodic deferred tax expense is based on the concept of? Cost Principle Going Concern Assumption Conservatism Matching PrincipleWhen income tax expense differs from income taxes currently payable on taxable income companies recognize deferred tax assets and deferred tax liabilities. What type of event would create a deferred tax asset and deferred tax liability? Please provide numerical examples. Discuss the two principal reasons income before taxes for financial reporting differs from taxable income. Please provide an argument over the life of the assets deferred liabilities and deferred assets cancel each other out. Use minimum two in text citation that must match peer reviewed references
- Indicate the type of Deferred Tax account created by Prepaid Expenses and Accrued Revenues, respectively. Select one: O a Asset Asset Ob. Liability, Liability Oc Asset, Liability O d. Liability, ASsetWhich of the following should be considered as nonmonetary? Group of answer choices Taxes payable Accrued expense and other payables Trade receivables Deferred tax liabilitiesDefinitions The FASB has defined several terms in regard to accounting for income taxes. Below are various code letters (for terms) followed by definitions. Code Letter Term Code Letter Term A. Future deductible amount H Deferred tax consequences B Income tax payable (or refund) I Future taxable amount Operating loss carryback Deferred tax liability D Valuation allowance K Temporary difference E Deferred tax asset Income tax expense (or benefit) F Operating loss carryforward M Deferred tax expense (or benefit) Taxable income Required: Indicate which term belongs with each definition by choosing the correct term. 1. The deferred tax consequences of future deductible amounts and operating loss carryforwards 2. A difference between the tax basis of an asset or liability and its reported amount in the financial statements that will result in taxable or deductible amounts in future years when the reported amount of the asset or liability is recovered or settled, respectively X 3. Temporary…
- 1. The amount of income taxes that relate to financial income subject to tax is reported on the income statement as A. long-term deferred income taxes (credit) C. income tax expense B. current deferred income taxes (debit) D. income tax payable 2. An item that would create a permanent difference in pretax financial and taxable income would be A. using accelerated depreciation for tax purposes & straight line depreciation for book purposes. B. using the percentage of completion method on long-term construction contracts. C. purchasing equipment previously leased with an operating lease in prior years. D. paying fines for violation of laws. 3. Which of the following is the most likely item to result in a deferred tax asset? A. using completed contract method of recognizing construction revenue tax purposes, but using percentage of completion method for financial reporting purposes. B. using accelerated depreciation for tax purposes but straight-line depreciation for accounting purposes.…a. Indicate which of the above items are permanent differences and which are temporary differences. Classify the permanent differences whether non-taxable revenues or non-deductible expenses. Cassify the temporary differences whether taxable temporary differences or deductibe temporary differences.b. Calculate the taxable income.c. Compute the income tax payable, deferred tax asset and deffered tax liability.d. Prepare all journal entries relating to income tax.e. Compute the total income tax expense, identifying separately the current income tax expense and the deferred tax expanseAccounting profit is O A. The The profit or loss is for a period determined before deducting in accordance tax expense O B. The profit or loss is for a period determined in accordance with tax law C. The profit or loss after for a period after deducting tax expense O D. The profit or loss after current tax expense determined accordance with tax law
