Question
In: Accounting
Bandung Corporation began 2020 with a $46,000 balance in the deferred tax liability account. At the...
Bandung Corporation began 2020 with a $46,000 balance in the deferred tax liability account. At the end of 2020, the related cumulative temporary difference amounts to $350,000 and it will reverse evenly over the next 2 years. Pretax accounting income for 2020 is $525,000, the tax rat for all years is 20%, taxable income for 2020 is $405,000.
a) Compute income taxes payable for 2020
b) Prepare the journal entry to record income tax expense, deferred income taxes, and income tax payable for 2020
c) Prepare the income tax expense section of the income statement for 2020 beginning with the line "Income before income tax"
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Sweet Corporation began 2017 with a $45,000 balance in the Deferred Tax Liability account. At the...
Sweet Corporation began 2017 with a $45,000 balance in the
Deferred Tax Liability account. At the end of 2017, the related
cumulative temporary difference amounts to $174,000, and it will
reverse evenly over the next 2 years. Pretax accounting income for
2017 is $354,000, the tax rate for all years is 40%, and taxable
income for 2017 is $318,000.
Income taxes payable for 2017? $______
B.) Prepare the journal entry to record income tax expense,
deferred income taxes, and income...
20x2 began with a $ 24,000 balance in the firm's deferred tax liability. This was based...
20x2 began with a $ 24,000 balance in the firm's deferred tax
liability. This was based on the 12/31/x1 prepaid insurance balance
of $120,000. The tax rate is 20%. The $120,000 prepaid insurance
balance coverage for 20x2 and 20x3 equally. In late December 20x2,
the firm performed accounting services for a client and billed the
client $20,000 for the work. The client is expected to remit
payment in February 20x3. Common revenue less expenses for 20x2
netted to $200,000(this amount...
At the end of 2020, Payne Industries had a deferred tax asset account with a balance...
At the end of 2020, Payne Industries had a deferred tax asset
account with a balance of $25 million attributable to a temporary
book-tax difference of $100 million in a liability for estimated
expenses. At the end of 2021, the temporary difference is $64
million. Payne has no other temporary differences and no valuation
allowance for the deferred tax asset. Taxable income for 2021 is
$180 million and the tax rate is 25%.
Required:
1. Prepare the journal entry(s) to...
At the end of 2020, Payne Industries had a deferred tax asset account with a balance...
At the end of 2020, Payne Industries had a deferred tax asset
account with a balance of $25 million attributable to a temporary
book-tax difference of $100 million in a liability for estimated
expenses. At the end of 2021, the temporary difference is $64
million. Payne has no other temporary differences. Taxable income
for 2021 is $180 million and the tax rate is 25%. Payne has a
valuation allowance of $10 million for the deferred tax asset at
the beginning...
Discuss the situations that will result in a deferred tax liability and a deferred tax asset....
Discuss the situations that will result in a deferred tax
liability and a deferred tax asset. Provide an example of each.
Prepare a journal entry for your examples. Discuss how deferred
liabilities affect the income statement.
The following facts relate to Sunland Corporation. 1. Deferred tax liability, January 1, 2020, $33,900. 2....
The following facts relate to Sunland Corporation.
1.
Deferred tax liability, January 1, 2020, $33,900.
2.
Deferred tax asset, January 1, 2020, $11,300.
3.
Taxable income for 2020, $118,650.
4.
Cumulative temporary difference at December 31, 2020, giving
rise to future taxable amounts, $259,900.
5.
Cumulative temporary difference at December 31, 2020, giving
rise to future deductible amounts, $107,350.
6.
Tax rate for all years, 20%. No permanent differences
exist.
7.
The company is expected to operate profitably in the...
The following facts relate to Novak Corporation. 1. Deferred tax liability, January 1, 2020, $24,400. 2....
The following facts relate to Novak Corporation.
1.
Deferred tax liability, January 1, 2020, $24,400.
2.
Deferred tax asset, January 1, 2020, $0.
3.
Taxable income for 2020, $115,900.
4.
Pretax financial income for 2020, $244,000.
5.
Cumulative temporary difference at December 31, 2020, giving
rise to future taxable amounts, $292,800.
6.
Cumulative temporary difference at December 31, 2020, giving
rise to future deductible amounts, $42,700.
7.
Tax rate for all years, 20%.
8.
The company is expected to operate...
The following facts relate to Headland Corporation. 1. Deferred tax liability, January 1, 2020, $44,800. 2....
The following facts relate to Headland Corporation.
1.
Deferred tax liability, January 1, 2020, $44,800.
2.
Deferred tax asset, January 1, 2020, $0.
3.
Taxable income for 2020, $106,400.
4.
Pretax financial income for 2020, $112,000.
5.
Cumulative temporary difference at December 31, 2020, giving
rise to future taxable amounts, $268,800.
6.
Cumulative temporary difference at December 31, 2020, giving
rise to future deductible amounts, $39,200.
7.
Tax rate for all years, 20%.
8.
The company is expected to operate...
The following facts relate to Oriole Corporation. 1. Deferred tax liability, January 1, 2020, $36,000. 2....
The following facts relate to Oriole Corporation.
1.
Deferred tax liability, January 1, 2020, $36,000.
2.
Deferred tax asset, January 1, 2020, $12,000.
3.
Taxable income for 2020, $126,000.
4.
Cumulative temporary difference at December 31, 2020, giving
rise to future taxable amounts, $276,000.
5.
Cumulative temporary difference at December 31, 2020, giving
rise to future deductible amounts, $114,000.
6.
Tax rate for all years, 20%. No permanent differences
exist.
7.
The company is expected to operate profitably in the...
What is the difference between a deferred tax asset and a deferred tax liability? Explain the...
What is the difference
between a deferred tax asset and a deferred tax liability?
Explain the difference
between a permanent difference and a timing (or temporary)
difference as related to tax and financial accounting, and how
those differences relate to deferred tax assets and deferred tax
liabilities
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