Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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Chapter 7, Problem 10P
To determine
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To choose: The correct option from the given options.
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Students have asked these similar questions
Marc, Inc., owns 75 percent of SRS Company. During the current year, SRS reported net income of $415,000 but paid a total cash dividend of only $110,000. What deferred income tax liability must be recognized in the consolidated balance sheet? Assume the tax rate is 40 percent.a. $25,380b. $18,300c. $22,140d. $41,340
ces
Kyle, Incorporated, owns 75 percent of CRT Company. During the current year, CRT reported net income of $680,000 but paid a total cash dividend of
only $120,000.
Required:
What deferred income tax liability must be recognized in the consolidated balance sheet? Assume the tax rate is 21 percent.
Multiple Choice
O
$37,950
$34,710
$30,870
For the year just ended, ThruCast Corp. had pretax earnings from operations
of $1.25 million. In addition, it received $110,000 in interest income from
bonds it held in XrayTech and it received $65,000 in dividend income from
its 8% common stock holding in Books-R-Us Corp. What is the total tax
liability for ThruCast Corp. for the year?
$299,114
$239,400
$292,425
$262,500
Chapter 7 Solutions
Advanced Accounting
Ch. 7 - Prob. 1QCh. 7 - Prob. 2QCh. 7 - Prob. 3QCh. 7 - How does the presence of an indirect ownership...Ch. 7 - Prob. 5QCh. 7 - In accounting for mutual ownerships, what is the...Ch. 7 - Prob. 7QCh. 7 - Prob. 8QCh. 7 - Prob. 9QCh. 7 - Prob. 10Q
Ch. 7 - Prob. 11QCh. 7 - Jones acquires Wilson, in part because the new...Ch. 7 - Prob. 13QCh. 7 - Prob. 1PCh. 7 - Prob. 2PCh. 7 - Prob. 3PCh. 7 - Which of the following is correct for two...Ch. 7 - Prob. 5PCh. 7 - Prob. 6PCh. 7 - Prob. 7PCh. 7 - Prob. 8PCh. 7 - Prob. 9PCh. 7 - Prob. 10PCh. 7 - Prob. 11PCh. 7 - Prob. 13PCh. 7 - Prob. 14PCh. 7 - Prob. 15PCh. 7 - Prob. 16PCh. 7 - Prob. 17PCh. 7 - Prob. 18PCh. 7 - Prob. 19PCh. 7 - Prob. 20PCh. 7 - Prob. 23PCh. 7 - Prob. 24PCh. 7 - Prob. 26P
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- Choose the correct. Marc, Inc., owns 75 percent of SRS Company. During the current year, SRS reported net income of $415,000 but paid a total cash dividend of only $110,000. What deferred income tax liability must be recognized in the consolidated balance sheet? Assume the tax rate is 40 percent.a. $25,380b. $18,300c. $22,140d. $41,340arrow_forwardPecorino Company had pretax financial income of P2,500,000 in the current year. The entity made corporate estimated tax payment in the amount of 180,000 during the current year. To compute the provision for income tax, the following information was provided: Interest income received 360,000 Tax depreciation in excess of financial statement amount 160,000 Rent received in advance 280,000 Corporate tax rate 30% What amount of total tax expense should be reported?a. 714,000b. 726,000c. 642,000d. 594,000arrow_forwardPecorino Company had pretax financial income of P2,500,000 in the current year. The entity made corporate estimated tax payment in the amount of 180,000 during the current year. To compute the provision for income tax, the following information was provided: Interest income received 360,000 Tax depreciation in excess of financial statement amount 160,000 Rent received in advance 280,000 Corporate tax rate 30% What amount of income tax payable should be reported?a. 498,000b. 606,000c. 330,000d. 570,000arrow_forward
- 3. Leer Corporation’s pretax income in 20x7 was P100,000. The temporary differences between amounts reported in the financial statements and the tax return are as follows; Depreciation in the financial statements was P8,000 more than the tax depreciation. The equity method of accounting resulting in financial statement income of P35,000. A P25,000 dividend was received during the year, which is eligible for the 80% dividends received deduction. Leer’s effective income tax rate was 30% in 20x7. In its 20x7 income statement, Leer should report a current provision for income taxes of __________.arrow_forwardWestwind Corporation reports the following results for the current year: Gross profit on sales $250,000 Long-term capital gain 25,000 Long-term capital loss 10,000 Short-term capital gain 7,500 Short-term capital loss 12,500 Operating expenses 80,000 What are Westwind's taxable income and regular tax liability before credits for the current year?arrow_forwardGrand Corporation reported pretax book income of $612,000. Tax depreciation exceeded book depreciation by $408,000. In addition, the company received $306,000 of tax-exempt municipal bond interest. The company's prior-year tax return showed taxable income of $51,000. Compute the company's current income tax expense or benefit. (Leave no answer blank. Enter N/A or zero.) 이 Current income tax Deferred income tax N/A expense $arrow_forward
- Pecorino Company had pretax financial income of P2,500,000 in the current year. The entity made corporate estimated tax payment in the amount of 180,000 during the current year. To compute the provision for income tax, the following information was provided: Interest income received 360,000 Tax depreciation in excess of financial statement amount 160,000 Rent received in advance 280,000 Corporate tax rate 30% What amount of permanent difference between book income and taxable income existed at year-end?arrow_forwardRadnor Corporation reports the following results for the current year: Gross profits on sales $135,000 Long-term capital loss $ 15,000 Short-term capital loss $4,000 Dividends from 60% owned domestic corporation $20,000 Operating expenses $ 55,000 Charitable contributions $15,000 What are Radnor's taxable income and income tax liability? What carrybacks and carryovers are available? If any?arrow_forwardPecorino Company had pretax financial income of P2,500,000 in the current year. The entity made corporate estimated tax payment in the amount of 180,000 during the current year. To compute the provision for income tax, the following information was provided: Interest income received 360,000 Tax depreciation in excess of financial statement amount 160,000 Rent received in advance 280,000 Corporate tax rate 30% 2. What amount of current tax expense should be reported? a. 786,000b. 510,000c. 750,000d. 678,000arrow_forward
- 3. Leer Corp.'s pretax income in 20x7 was P100,000. The temporary differences between amounts reported in the financial statements and the tax return are as follows: Depreciation in the financial statements was P8,000 more than tax depreciation. • The equity method of accounting resulting in financial statement income of P35,000. A P25,000 dividend was received during the year, which is eligible for the 80% dividends received deduction. Leer's effective income tax rate was 30% in 20x7. In its 20x7 income statement, Leer should report a current provision for income taxes of b. 23,400 c. 21,900 d. 18,600 a. 26,400 (AICPA)arrow_forwardLast year, Martyn Company had $340,000 in taxable income from its operations, $50,000 in interest income, and $100,000 in dividend income. Its corporate tax rate is 25%. What was the company's tax liability for the year? Assume a 50% dividend exclusion for tax on dividends. a. $110,000 b. $85,000 c. $122,500 d. $97,500 e. $110,000arrow_forwardLintner Beverage Corp. reported the following information from their financial statements: Operating income (EBIT) = $20,000,000 Interest payments on long-term debt = $1,750,000 Dividend income = $1,000,000 Calculate Lintner's total tax liability using the corporate tax schedule below: Taxable Income $0-$50,000 $50,000-$75,000 $75,000-$100,000 $100,000-$335,000 $335,000-$10,000,000 $10,000,000-$15,000,000 $15,000,000-$18,333,333 Over $18,333,333 a. $7,515,881 b. $6,817,125 c. $7,157,982 d. $6,492,500 e. $6,167,875 Tax on Base of Bracket $0 7,500 13,750 22,250 113,900 3,400,000 5,150,000 6,416,667 Percentage on Excess above Base 15% 25 34 39 344 35 38 35arrow_forward
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