E19-1 (One Temporary difference, Future Taxable Amounts, One Rate, No Beginning Deferred Taxes) South Carolina Corporation has one temporary difference at the end of 2008 that will reverse and cause taxable amounts of $55,000 in 2009, $60,000 in 2010, and $65,000 in 2011. South Carolina's pretax financial income for 2008 is $300,000 and the tax rate us 30% for all years. There are no deferred taxes at the beginning of 2008.
Instructions
a.) Compute taxable income and income taxes payable for 20008.
b.) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2008.
c.) Prepare the income tax expense section of the income statement for 2008, beginning with the line "Income before income taxes"
Click here for the solution: South Carolina Corporation has one temporary difference at the end of 2008 that will reverse and cause taxable amounts
Showing posts with label taxable. Show all posts
Showing posts with label taxable. Show all posts
Wednesday, November 11, 2015
Wednesday, October 14, 2015
Water Corporation reports $500,000 of taxable income for the current year
Water Corporation reports $500,000 of taxable income for the current year. The following additional information is available:
• For the current year, Water reports an $80,000 long-term capital loss and no capital gains.
• Taxable income includes $80,000 of dividends from a 10%-owned domestic corporation.
• Water paid fines and penalties of $6,000 that were not deducted in computing taxable income.
• In computing this year’s taxable income, Water deducted a $20,000 NOL carryover
from a prior tax year.
• Water claimed a $10,000 U.S. production activities deduction.
• Taxable income includes a deduction for $40,000 of depreciation that exceeds the depreciation allowed for E&P purposes.
Assume a 34% corporate tax rate. What is Water’s current E&P for this year?
Click here for the solution: Water Corporation reports $500,000 of taxable income for the current year
• For the current year, Water reports an $80,000 long-term capital loss and no capital gains.
• Taxable income includes $80,000 of dividends from a 10%-owned domestic corporation.
• Water paid fines and penalties of $6,000 that were not deducted in computing taxable income.
• In computing this year’s taxable income, Water deducted a $20,000 NOL carryover
from a prior tax year.
• Water claimed a $10,000 U.S. production activities deduction.
• Taxable income includes a deduction for $40,000 of depreciation that exceeds the depreciation allowed for E&P purposes.
Assume a 34% corporate tax rate. What is Water’s current E&P for this year?
Click here for the solution: Water Corporation reports $500,000 of taxable income for the current year
The following differences between financial and taxable income were reported by Dider Corporation for the current year
2. The following differences between financial and taxable income were reported by Dider Corporation for the current year.
(a) Excess of tax depreciation over book depreciation $60,000
(b) Interest revenue on municipal bonds $9,000
(c) Excess of estimated warranty expense over actual expenditures $54,000
(d) Unearned rent received $12,000
(e) Amortization of goodwill $30,000
(f) Excess of income reported under percentage-of-completion accounting for financial reporting over competed-contract accounting used for tax reporting $45,000
(g) Interest on indebtedness incurred to purchase tax-exempt securities $3,000
(h) Unrealized losses on marketable securities recognized for financial reporting $18,000
Assume that Dider corp. had pretax accounting income [before considering items (a) through (h)] of $900,000 for the current year. Compute the taxable income for the current year. Write your figures in the form attached and show all your work
Click here for the solution: The following differences between financial and taxable income were reported by Dider Corporation for the current year
(a) Excess of tax depreciation over book depreciation $60,000
(b) Interest revenue on municipal bonds $9,000
(c) Excess of estimated warranty expense over actual expenditures $54,000
(d) Unearned rent received $12,000
(e) Amortization of goodwill $30,000
(f) Excess of income reported under percentage-of-completion accounting for financial reporting over competed-contract accounting used for tax reporting $45,000
(g) Interest on indebtedness incurred to purchase tax-exempt securities $3,000
(h) Unrealized losses on marketable securities recognized for financial reporting $18,000
Assume that Dider corp. had pretax accounting income [before considering items (a) through (h)] of $900,000 for the current year. Compute the taxable income for the current year. Write your figures in the form attached and show all your work
Click here for the solution: The following differences between financial and taxable income were reported by Dider Corporation for the current year
Monday, August 31, 2015
How much of each of the following prizes or awards is taxable
How much of each of the following prizes or awards is taxable?
a. Cheline received a $50,000 gift bag at the Oscars in 2010.
b. Jon received a gold watch worth $350 for 25 years of service to his accounting firm,
c. Kerry won $1,000,000 in her state lottery.
d. Deborah is a professor who received $50,000 as an award for her scientific research from the University that employs her.
Click here for the solution: How much of each of the following prizes or awards is taxable
a. Cheline received a $50,000 gift bag at the Oscars in 2010.
b. Jon received a gold watch worth $350 for 25 years of service to his accounting firm,
c. Kerry won $1,000,000 in her state lottery.
d. Deborah is a professor who received $50,000 as an award for her scientific research from the University that employs her.
Click here for the solution: How much of each of the following prizes or awards is taxable
Sunday, August 23, 2015
Cypress Corporation has regular taxable income of $170,000
Cypress Corporation has regular taxable income of $170,000 (assume annual gross receipts are greater than $5 million) and regular tax liability of $49,550 for 2010. The corporation also has tax preference items amounting to $105,000. Calculate Cypress Corporation's alternative minimum tax liability. Assume Cypress Corporation is not a "small corporation".
Click here for the solution: Cypress Corporation has regular taxable income of $170,000
Click here for the solution: Cypress Corporation has regular taxable income of $170,000
Ulmus Corporation has $1,230,000 in taxable income for 2010
Ulmus Corporation has $1,230,000 in taxable income for 2010. Calculate the corporation's income tax liability for 2010.
Click here for the solution: Ulmus Corporation has $1,230,000 in taxable income for 2010
Click here for the solution: Ulmus Corporation has $1,230,000 in taxable income for 2010
Quince Corporation has taxable income of $450,000 for its 2010 calendar tax year
Quince Corporation has taxable income of $450,000 for its 2010 calendar tax year. Calculate the corporation's income tax liability for 2010 before tax credits.
Click here for the solution: Quince Corporation has taxable income of $450,000 for its 2010 calendar tax year
Click here for the solution: Quince Corporation has taxable income of $450,000 for its 2010 calendar tax year
Saturday, August 1, 2015
Compute consolidated taxable income for the calendar year Moose Group
Compute consolidated taxable income for the calendar year Moose Group, which elected consolidated status immediately upon the creation of the two member corporations on January 1, 2010. All recognized income is ordinary in nature, and no intercompany transactions were completed during the indicated years.
Year Moose Corporation Elk Corporation
2010 $ 250,000 $ 50,000
2011 $ 250,000 (110,000)
2012 $ 250,000 (400,000)
2013 $ 250,000 75,000
Click here for the solution: Compute consolidated taxable income for the calendar year Moose Group
Year Moose Corporation Elk Corporation
2010 $ 250,000 $ 50,000
2011 $ 250,000 (110,000)
2012 $ 250,000 (400,000)
2013 $ 250,000 75,000
Click here for the solution: Compute consolidated taxable income for the calendar year Moose Group
Wednesday, June 17, 2015
The Hunter Company purchased a light truck on January 2, 2010 for $18,000
Problem 11-11 (P11-11) Depreciation for Financial Statements and Income Tax Purposes
The Hunter Company purchased a light truck on January 2, 2010 for $18,000. The truck, which will be used for deliveries, has the following characteristics: Estimated life: 5 years Estimated residual value: $3,000 Depreciation for financial statements: straight-line Depreciation for income tax purposes: MARCS (three- year-life) From 2010 through 2014, each year, the company had sales of $100,000, cost of goods sold of $60,000, and operating expenses (excluding depreciation) of $15,000. The truck was disposed of on December 31, 2014 for $2,000.
1. Prepare an income statement for financial reporting through pretax accounting income for each of the five years, 2010 through 2014.
2. Prepare, an income statement for income tax purposes through taxable income for each of the five years, 2010 through 2014.
3. Compare the total income for all five years under requirement 1 and Requirement 2.
Click here for the solution: The Hunter Company purchased a light truck on January 2, 2010 for $18,000
The Hunter Company purchased a light truck on January 2, 2010 for $18,000. The truck, which will be used for deliveries, has the following characteristics: Estimated life: 5 years Estimated residual value: $3,000 Depreciation for financial statements: straight-line Depreciation for income tax purposes: MARCS (three- year-life) From 2010 through 2014, each year, the company had sales of $100,000, cost of goods sold of $60,000, and operating expenses (excluding depreciation) of $15,000. The truck was disposed of on December 31, 2014 for $2,000.
1. Prepare an income statement for financial reporting through pretax accounting income for each of the five years, 2010 through 2014.
2. Prepare, an income statement for income tax purposes through taxable income for each of the five years, 2010 through 2014.
3. Compare the total income for all five years under requirement 1 and Requirement 2.
Click here for the solution: The Hunter Company purchased a light truck on January 2, 2010 for $18,000
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