Income Tax Expenses The expenses which are related to the taxable income of the individuals and business entities for an accounting period, and are recognized by them for the purpose of federal government and state government tax are called as income tax expenses. To explain: The difference between income tax expenses and income tax obligation.

Question

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Answer 1

Question

Chapter 16, Problem 16.1Q

To determine

Income Tax Expenses

The expenses which are related to the taxable income of the individuals and business entities for an accounting period, and are recognized by them for the purpose of federal government and state government tax are called as income tax expenses.

To explain: The difference between income tax expenses and income tax obligation.

Expert Solution & Answer

Answer to Problem 16.1Q

The income tax expenses contain both the current and deferred tax. $12.3 million expense includes $7.9 million as the amount which the company is liable to pay as income tax for the current year and $4.4 million ($12.3 million−$7.9 million) of income tax as deferred tax liability.

Explanation of Solution

Income tax expense combines both current and deferred tax.

Here, the company’s income statement reports income tax expense as $12.3 million and current year’s tax obligation as $7.9 million. So the difference amount of $4.4 million ($12.3 million−$7.9 million) is treated as deferred tax liability.

Conclusion

Hence, the difference amount of $4.4 million ($12.3 million−$7.9 million) can be explained as deferred tax liability.

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Students have asked these similar questions

XYZ is a calendar-year corporation that began business on January 1, 2021. For the year, it reported the following information in its current-year audited income statement. Notes with important tax information are provided below. Use Exhibit 16-6. XYZ corporation Income statement For current year Book Income Revenue from sales $ 40,400,000 Cost of Goods Sold (27,270,000) Gross profit $ 13,130,000 Other income: Income from investment in corporate stock 300,0001 Interest income 21,6002 Capital gains (losses) (4,000) Gain or loss from disposition of fixed assets 3,0003 Miscellaneous income 50,000 Gross Income $ 13,500,600 Expenses: Compensation (7,504,000)4 Stock option compensation (204,000)5 Advertising (1,354,000) Repairs and Maintenance (77,000) Rent (24,000) Bad Debt expense (43,000)6 Depreciation (1,450,000)7 Warranty expenses (74,000)8 Charitable donations (500,000)9 Meals (all at restaurants) (18,400) Goodwill impairment…

Which of the following statements regarding accounting methods is false? A. A C corporation with gross receipts of more than $5 million per year must use the cash method of accounting. B. A sole proprietorship may generally use the cash receipts and disbursements method of accounting unless the business maintains inventory, and gross receipts for the three prior tax periods averages $29 million or less in 2023 ($27 million in 2022 and $26 million in 2019, 2020 and 2021). C. A limited liability company may use the cash method of accounting unless it has elected to be taxed as a corporation, in which its method of accounting may be restricted. D. An S corporation may use the cash method of accounting unless it maintains inventory, and gross receipts for the three prior tax periods averages $29 million or less in 2023 ($27 million in 2022 and $26 million in 2019, 2020 and 2021.

Which of the following statements is incorrect? Some corporations can use the cash-basis of accounting. Corporations that own foreign subsidiaries cannot file a Form 1120. A corporation can choose a fiscal year-end of its choice when filing its first tax return. A calendar year corporate tax return is due 3½ months after the end of the fiscal year

Answer 2

Question

Chapter 16, Problem 16.1Q

To determine

Income Tax Expenses

The expenses which are related to the taxable income of the individuals and business entities for an accounting period, and are recognized by them for the purpose of federal government and state government tax are called as income tax expenses.

To explain: The difference between income tax expenses and income tax obligation.

Expert Solution & Answer

Answer to Problem 16.1Q

The income tax expenses contain both the current and deferred tax. $12.3 million expense includes $7.9 million as the amount which the company is liable to pay as income tax for the current year and $4.4 million ($12.3 million−$7.9 million) of income tax as deferred tax liability.

Explanation of Solution

Income tax expense combines both current and deferred tax.

Here, the company’s income statement reports income tax expense as $12.3 million and current year’s tax obligation as $7.9 million. So the difference amount of $4.4 million ($12.3 million−$7.9 million) is treated as deferred tax liability.

Conclusion

Hence, the difference amount of $4.4 million ($12.3 million−$7.9 million) can be explained as deferred tax liability.

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Answer 3

Question

Chapter 16, Problem 16.1Q

To determine

Income Tax Expenses

The expenses which are related to the taxable income of the individuals and business entities for an accounting period, and are recognized by them for the purpose of federal government and state government tax are called as income tax expenses.

To explain: The difference between income tax expenses and income tax obligation.

Expert Solution & Answer

Answer to Problem 16.1Q

The income tax expenses contain both the current and deferred tax. $12.3 million expense includes $7.9 million as the amount which the company is liable to pay as income tax for the current year and $4.4 million ($12.3 million−$7.9 million) of income tax as deferred tax liability.

Explanation of Solution

Income tax expense combines both current and deferred tax.

Here, the company’s income statement reports income tax expense as $12.3 million and current year’s tax obligation as $7.9 million. So the difference amount of $4.4 million ($12.3 million−$7.9 million) is treated as deferred tax liability.

Conclusion

Hence, the difference amount of $4.4 million ($12.3 million−$7.9 million) can be explained as deferred tax liability.

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Answer 4

Question

Chapter 16, Problem 16.1Q

To determine

Income Tax Expenses

The expenses which are related to the taxable income of the individuals and business entities for an accounting period, and are recognized by them for the purpose of federal government and state government tax are called as income tax expenses.

To explain: The difference between income tax expenses and income tax obligation.

Expert Solution & Answer

Answer to Problem 16.1Q

The income tax expenses contain both the current and deferred tax. $12.3 million expense includes $7.9 million as the amount which the company is liable to pay as income tax for the current year and $4.4 million ($12.3 million−$7.9 million) of income tax as deferred tax liability.

Explanation of Solution

Income tax expense combines both current and deferred tax.

Here, the company’s income statement reports income tax expense as $12.3 million and current year’s tax obligation as $7.9 million. So the difference amount of $4.4 million ($12.3 million−$7.9 million) is treated as deferred tax liability.

Conclusion

Hence, the difference amount of $4.4 million ($12.3 million−$7.9 million) can be explained as deferred tax liability.

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Answer 5

Chapter 16, Problem 16.1Q

To determine

Income Tax Expenses

The expenses which are related to the taxable income of the individuals and business entities for an accounting period, and are recognized by them for the purpose of federal government and state government tax are called as income tax expenses.

To explain: The difference between income tax expenses and income tax obligation.

Expert Solution & Answer

Answer to Problem 16.1Q

The income tax expenses contain both the current and deferred tax. $12.3 million expense includes $7.9 million as the amount which the company is liable to pay as income tax for the current year and $4.4 million ($12.3 million−$7.9 million) of income tax as deferred tax liability.

Explanation of Solution

Income tax expense combines both current and deferred tax.

Here, the company’s income statement reports income tax expense as $12.3 million and current year’s tax obligation as $7.9 million. So the difference amount of $4.4 million ($12.3 million−$7.9 million) is treated as deferred tax liability.

Conclusion

Hence, the difference amount of $4.4 million ($12.3 million−$7.9 million) can be explained as deferred tax liability.

Answer 6

Chapter 16, Problem 16.1Q

To determine

Income Tax Expenses

The expenses which are related to the taxable income of the individuals and business entities for an accounting period, and are recognized by them for the purpose of federal government and state government tax are called as income tax expenses.

To explain: The difference between income tax expenses and income tax obligation.

Expert Solution & Answer

Answer to Problem 16.1Q

The income tax expenses contain both the current and deferred tax. $12.3 million expense includes $7.9 million as the amount which the company is liable to pay as income tax for the current year and $4.4 million ($12.3 million−$7.9 million) of income tax as deferred tax liability.

Explanation of Solution

Income tax expense combines both current and deferred tax.

Here, the company’s income statement reports income tax expense as $12.3 million and current year’s tax obligation as $7.9 million. So the difference amount of $4.4 million ($12.3 million−$7.9 million) is treated as deferred tax liability.

Conclusion

Hence, the difference amount of $4.4 million ($12.3 million−$7.9 million) can be explained as deferred tax liability.

Answer 7

Chapter 16, Problem 16.1Q

To determine

Income Tax Expenses

The expenses which are related to the taxable income of the individuals and business entities for an accounting period, and are recognized by them for the purpose of federal government and state government tax are called as income tax expenses.

To explain: The difference between income tax expenses and income tax obligation.

Answer 8

Expert Solution & Answer

Answer to Problem 16.1Q

The income tax expenses contain both the current and deferred tax. $12.3 million expense includes $7.9 million as the amount which the company is liable to pay as income tax for the current year and $4.4 million ($12.3 million−$7.9 million) of income tax as deferred tax liability.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Income tax expense combines both current and deferred tax.

Here, the company’s income statement reports income tax expense as $12.3 million and current year’s tax obligation as $7.9 million. So the difference amount of $4.4 million ($12.3 million−$7.9 million) is treated as deferred tax liability.

Answer 12

Conclusion

Hence, the difference amount of $4.4 million ($12.3 million−$7.9 million) can be explained as deferred tax liability.

Answer 13

Ch. 16 - Prob. 16.1Q Ch. 16 - A deferred tax liability (or asset) is described...Ch. 16 - Prob. 16.3Q Ch. 16 - Prob. 16.4Q Ch. 16 - Temporary differences result in future taxable or...Ch. 16 - Identify three examples of differences with no...Ch. 16 - The income tax rate for Hudson Refinery has been...Ch. 16 - Suppose a tax reform bill is enacted that causes...Ch. 16 - A net operating loss occurs when tax-deductible...Ch. 16 - Prob. 16.10Q

Answer to Problem 16.1Q

Explanation of Solution

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