Question

In: Accounting

In 2018, North Company rented a villa for three years and received a total of $60,000....

In 2018, North Company rented a villa for three years and received a total of $60,000. The rent is earned equally over the period 2018-2020. For tax purposes, North should report the full $60,000 on 2018 tax return form. By year end, the company reported an income tax expense of $22,000 and income tax payable of $37,000. In 2019, the company terminated a maintenance contract and agreed to pay $10,000 per year for 2019-2021. The total termination amount is fully deducted for financial reporting purposes and deducted as paid for tax purposes. The pretax financial income for 2019 is $90,000. The tax rates are 30% for 2018 and 35% for 2019. By end of 2019, the government announced the change of tax rate for future periods. a. Prepare the journal entry to record income taxes for 2019. b. Which approach have you applied in answering part (a)? what are the main objectives of this approach?

Solutions

Expert Solution

Please give positive rating, your feedback is valuable to me.

In case, any problem please leave a comment.

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

In 2018, North Company rented a villa for three years and received a total of $60,000....
In 2018, North Company rented a villa for three years and received a total of $60,000. The rent is earned equally over the period 2018-2020. For tax purposes, North should report the full $60,000 on 2018 tax return form. By year end, the company reported an income tax expense of $22,000 and income tax payable of $37,000. In 2019, the company terminated a maintenance contract and agreed to pay $10,000 per year for 2019-2021. The total termination amount is fully...
a. What is the present value​ (PV) of $60,000 received thirty years from​ now, assuming the...
a. What is the present value​ (PV) of $60,000 received thirty years from​ now, assuming the interest rate is 6​% per​ year? a. 10,447 b.8880 c. 18,282 d. 39,000 b. If $546 invested today yields $600 in one​ year's time, what is the discount​ factor? a. 1.91 b. 0.09 c. 1.82 d. 0.91 c. If the one​-year discount factor is equal to 0.95238​, the interest must be equal​ to: a.5.0% b. 4.5% c.2.5% d.4.0%
Company X is setting up capacity in Europe and North America for the next three years....
Company X is setting up capacity in Europe and North America for the next three years. Annual demand in each market is 2 million kilograms (kg) and is likely to stay at that level. The two choices under consideration are building 4 million units of capacity in North America or building 2 million units of capacity in each of the two locations. Building two plants will incur an additional one-time cost of $2 million. The variable cost of production in...
Company X is setting up capacity in Europe and North America for the next three years....
Company X is setting up capacity in Europe and North America for the next three years. Annual demand in each market is 2 million kilograms (kg) and is likely to stay at that level. The two choices under consideration are building 4 million units of capacity in North America or building 2 million units of capacity in each of the two locations. Building two plants will incur an additional one-time cost of $2 million. The variable cost of production in...
The following data is available for Crater Corporation’s North American division for the years 2018 and...
The following data is available for Crater Corporation’s North American division for the years 2018 and 2019. During these years there were no inventories in the system. 2019 2018 Production quantity 53,000 57,000 Number of customers 13,200 12,300 Revenues $ 24,500,000 $ 25,940,000 Expenses Direct materials & components $ 3,219,500 $ 3,552,700 Direct production wages (1) 1,463,600 1,606,200 Production supervisory salaries 267,900 244,600 Salaries paid to sales representatives (2) 587,500 609,100 Advertising 685,700 578,800 Insurance (3) 120,870 115,800 Building rent...
Over the next three years, a firm is expected to earn economic profits of $60,000 in...
Over the next three years, a firm is expected to earn economic profits of $60,000 in the first year, $50,000 in the second year, and $20,000 in the third year. After the end of the third year, the firm will go out of business. a. If the risk-adjusted discount rate is 6 percent for each of the next three years, the value of the firm is $________. The firm can be sold today for a price of $________. b. If...
Your company purchased a machine for $60,000. The loan is for four years and calls for...
Your company purchased a machine for $60,000. The loan is for four years and calls for 8% interest. What will be the monthly payment due on the loan?
Bank of North Americans (BNA) has total assets of $250 million with duration of 3.5 years...
Bank of North Americans (BNA) has total assets of $250 million with duration of 3.5 years and total liabilities of $225 million with duration of 1.25 years. If the interest rates decline from 9% to 8% what will the impact on the bank's net worth in absolute terms (or in dollars).
On Jan 1, 2018, the North Sea Company purchased a highsea platform for $ 12,000,000 and...
On Jan 1, 2018, the North Sea Company purchased a highsea platform for $ 12,000,000 and paid $2,000,000 as a downpyament while the balance will be paid over the next 10 years in installments of $500,000 every six months , starting July 1, 2018. The market rate on Jan 1, 2018 was 6%. Requirements: a.   For the how much the North Sea Company should recognize the platform on Jan 1, 2018? Show your calculation. b.   On Jan 1, 2025, the...
You have won $10,000 today, $20,000 three years from today, and $60,000 eight years from today....
You have won $10,000 today, $20,000 three years from today, and $60,000 eight years from today. As an alternative, you can receive your winnings as a 10-year annuity with the first payment received four years from today. If you require a 6% return on your investment, how much must the annuity pay you each year for you to select that option?
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT