Question
In: Accounting
Smyrna Company had financial and taxable incomes as follows: 2016 2017
- Smyrna Company had financial and taxable incomes as follows:
2016 2017 2018
Pretax financial income $150,000 $140,000 $135,000
Taxable income 115,000 140,000 170,000
The tax rate for all three years was 30%.
Required:
a. Prepare the journal entries to record income taxes for all three years.
b. Explain why the taxes paid in 2018 are different from the tax return and the amount reported in the financial statements and provide an example of what could cause this difference.
ANSWER:
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Golden Heart company began operations in 2016 and had a financial income before taxes and taxable...
Golden Heart company began operations in 2016 and had a
financial income before taxes and taxable income for the year
ending 12/31/2016 Of 300,000. Their tax rate was 30%. They properly
recorded the following entry at 12/31/2016:
Account
Dr
Cr
Income Tax
expense
90,000
Income Tax payable
90,000
Early in 2017 they paid their taxes and continued
operating their business. Due to downturn in the economy. They had
net operating loss of 800,000 for the...
Hendry Corp. reported net incomes for the last three years as follows: 2018 2017 2016 $180,000...
Hendry Corp. reported net incomes for the last three years as
follows: 2018 2017 2016 $180,000 $240,000 $225,000 During the 2018
year-end audit, Hendry's newly appointed auditors discover that
Hendry bought a machine on January 1, 2015 for $125,000 cash, with
a $25,000 estimated residual value and a five-year life. The
company debited an expense account for the entire cost of the
asset. Hendry uses straight-line depreciation for all machinery.
Instructions (Ignore all income tax effects) a) Prepare the general...
The pretax financial income (or loss) figures for Tamarisk Company are as follows. 2016 275,000 2017...
The pretax financial income (or loss) figures for Tamarisk
Company are as follows.
2016
275,000
2017
88,000
2018
(176,000
)
2019
(115,000
)
2020
148,000
2021
108,000
Pretax financial income (or loss) and taxable income (loss) were
the same for all years involved. Assume a 45% tax rate for 2016,
and a 20% tax rate for the remaining years.
Prepare the journal entries for the years 2017 to 2021 to record
income tax expense and the effects of the net...
The Income Statement for XYZ Company for 2016 and 2017 is as follows: 2017 Sales $4,000,000...
The Income Statement for XYZ Company for 2016 and 2017 is as
follows:
2017
Sales $4,000,000
Cost of Goods Sold 2,500,000 Gross Profit 1,500,000 Selling
Expense 600,000 Administrative Expense 200,000 Total Operating
Expense 800,000 Income from Operations 700,000 Income Tax Expense
50,000 Net Income 650,000
2016 $3,500,000 2,400,000 1,100,000 700,000 150,000 850,000
250,000 20,000 230,000
Instructions: Using the above comparative horizontal analysis
for ABC Company.
The inventories of Berry Company for the years 2016 and 2017 are as follows: Cost Market...
The inventories of Berry Company for the years 2016 and 2017 are
as follows:
Cost
Market
January 1, 2016
$10,000
$10,000
December 31, 2016
13,000
11,500
December 31, 2017
15,000
14,000
Berry uses a perpetual inventory system.
Assume Berry uses the direct method.
Prepare the necessary journal entries to record:
1. the correct inventory valuation on December 31, 2016
2. the reduction in inventory when the inventory from December
31, 2016 is sold during 2017
3. the correct inventory valuation...
The inventories of Berry Company for the years 2016 and 2017 are as follows: Cost Market...
The inventories of Berry Company for the years 2016 and 2017 are
as follows:
Cost
Market
January 1, 2016
$10,000
$10,000
December 31, 2016
13,000
11,500
December 31, 2017
15,000
14,000
Berry uses a perpetual inventory system.
Required:
1.
Assume the inventory that
existed at the end of 2016 was sold in 2017. Prepare the necessary
journal entries at the end of each year to record the correct
inventory valuation if Berry uses the:
a. direct method
b. allowance method...
In 2016, it was reported that 16% of 500 Utah families had incomes below the poverty...
In 2016, it was reported that 16% of 500 Utah families had
incomes below the poverty level. At the same time, 11.3% of 450
Wyoming families had incomes below the poverty level. You need to
find out if there was a significant difference in proportion of
families with incomes below the poverty level in these two states.
(a) State the research question. (b) State both the null and
alternative hypotheses. (c) Determine the critical values (use 5%
significance level). (d)...
In 2016, it was reported that 16% of 500 Utah families had incomes below the poverty...
In 2016, it was reported that 16% of 500 Utah families had
incomes below the poverty level. At the same time, 11.3% of 450
Wyoming families had incomes below the poverty level. You need to
find out if there was a significant difference in proportion of
families with incomes below the poverty level in these two states.
Determine the critical values (use 5% significance level).alculate
the p-value for the test. (g) Assess the strength of your decision
in part (d)...
In 2016, it was reported that 80 of 500 Utah families had incomes below the poverty...
In 2016, it was reported that 80 of 500 Utah families had
incomes below the poverty level. At the same time, 54 of 450
Wyoming families had incomes below the poverty level. You need to
find out if there was a significant difference in proportion of
families with incomes below the poverty level in these two
states.
(a) Calculate a 95% confidence interval for the difference
between the two corresponding population proportions.
(b) Which state has a higher proportion of...
The reported net incomes for the first 2 years of Sandhill Co. were as follows: 2017,...
The reported net incomes for the first 2 years of Sandhill Co.
were as follows: 2017, $169,000; 2018, $225,000. Early in 2019, the
following errors were discovered. 1. Depreciation of equipment for
2017 was overstated by $7,900. 2. Depreciation of equipment for
2018 was understated by $15,400. 3. December 31, 2017 ending
inventory was overstated by $20,300. 4. December 31, 2018 inventory
was overstated by $28,300.
Prepare the correcting entry necessary when these errors are
discovered. Assume that the books...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Case 7 of the textbook examines the rise of Wal-Mart as a corporate bohemoth. One of...
- The type of listening that involves trying to understand a situation from the speaker’s perspective is...
- Based on the loanable funds theory, explain how each of the following changes should impact interest...
- research paper: each student will be responsible for writing an argumentative research paper discussion a topic...
- In java based on the classes provided finish the program per the requirements: ----------------------------------------------Class1 package cardgame;...
- Identify two cultures and analyze the nurturing process within each culture and discuss the impact the...
- Digital security is an increasing concern is the Internet age. In order to protect sensitive information...
ADVERTISEMENT