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In: Accounting
Deferred Tax Calculations (Appendix) Wyhowski Inc. reported income from operations, before taxes, for 2015-2017 as follows:...
Deferred Tax Calculations (Appendix)
Wyhowski Inc. reported income from operations, before taxes, for 2015-2017 as follows:
| 2015 | $473,000 |
| 2016 | 541,000 |
| 2017 | 634,000 |
When calculating income, Wyhowski deducted depreciation on plant equipment. The equipment was purchased January 1, 2015, at a cost of $196,000. The equipment is expected to last three years and have a(n) $16,000 salvage value. Wyhowski uses straight-line depreciation for book purposes. For tax purposes, depreciation on the equipment is $113,000 in 2015, $45,000 in 2016, and $22,000 in 2017. Wyhowski's tax rate is 35%.
Required:
Enter all amounts as positive numbers.
1. How much did Wyhowski pay in income tax each year? If required, round all calculations to the nearest dollar.
| Year | Taxes Paid |
| 2015 | $ |
| 2016 | $ |
| 2017 | $ |
2. How much income tax expense did Wyhowski record each year?
| Year | Income Tax Expense |
| 2015 | $ |
| 2016 | $ |
| 2017 | $ |
3. What is the balance in the Deferred Income Tax account at the end of 2015, 2016, and 2017? If your answer is zero, enter "0". If required, round all calculations to the nearest dollar.
| Year | Balance | Debit or Credit |
| 2015 | $ | Credit |
| 2016 | $ | Credit |
| 2017 | $ | No balance |
Solutions
Expert Solution
| Computation of Income Tax Expenses- Wyhowwski Inc. | |||
| 2015 | 2016 | 2017 | |
| Income from Operation before tax | $473,000.00 | $541,000.00 | $634,000.00 |
| Tax Rate | 35% | 35% | 35% |
| Income tax | $165,550.00 | $189,350.00 | $221,900.00 |
| Computation of Tax Paid - Wyhowwski Inc. | |||
| 2015 | 2016 | 2017 | |
| Income from Operation before tax | $473,000.00 | $541,000.00 | $634,000.00 |
| Add:
Depreciation as per Books ( 196000-16000)/3 |
60,000.00 | 60,000.00 | 60,000.00 |
| Less: Depreciation as per tax | $113,000.00 | $45,000.00 | $22,000.00 |
| Taxable Income | $420,000.00 | $556,000.00 | $672,000.00 |
| Tax Rate | 35% | 35% | 35% |
| Income tax | $147,000.00 | $194,600.00 | $235,200.00 |
| Part-3 | |||
| 2015 | 2016 | 2017 | |
|
Depreciation a s per Books ( 196000-16000)/3 |
60,000.00 | 60,000.00 | 60,000.00 |
| Less: Depreciation as per tax | $113,000.00 | $45,000.00 | $22,000.00 |
| Temporary Difference | (53,000.00) | 15,000.00 | 38,000.00 |
| Deferred Income Tax | 18550 | 13300 | 0 |
| Credit | Credit | No Balance | |
ekkarill92 answered 2 years agoRelated Solutions
Deferred Tax Calculations (Appendix) Wyhowski Inc. reported income from operations, before taxes, for 2015-2017 as follows:...
Deferred Tax
Calculations (Appendix)
Wyhowski Inc. reported
income from operations, before taxes, for 2015-2017 as follows:
2015
$394,000
2016
451,000
2017
528,000
When calculating
income, Wyhowski deducted depreciation on plant equipment. The
equipment was purchased January 1, 2015, at a cost of $164,000. The
equipment is expected to last three years and have a(n) $14,000
salvage value. Wyhowski uses straight-line depreciation for book
purposes. For tax purposes, depreciation on the equipment is
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Deferred Tax Calculations (Appendix) Wyhowski Inc. reported income from operations, before taxes, for 2015-2017 as follows:...
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2016
279,000
2017
327,000
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