Question

In: Accounting

The Stephen’s Marine Construction Company began operations in January 2019. After the first year of operations,...

The Stephen’s Marine Construction Company began operations in January 2019. After the first year of operations, the following information was provided to you for year ending December 31, 2019. 1. Pretax financial statement income: $805,600 2. Differences between financial statement income and tax return income were as follows: a. Gross profit reported on long-term contracts was $175,000 on the financial statement, and $60,000 on the tax return. b. Depreciation expense was $14,000 on the financial statement, and $28,000 on the tax return. c. The company was fined $8,000 for OSHA violations on a construction project. The fine was reported as an expense in the financial statements; however, it is not deductible for tax purposes. d. The company reported “unearned” revenue of $25,000 on the balance sheet as of December 31, 2019, however, on the tax return the $25,000 was taxable income in 2019. Required a. Prepare a schedule to reconcile F/S income to T/R income. b. Prepare all journal entries to account for taxes in 2019. Note: Tax rate is 40%

a. Reconciliation Schedule

b. Journal Entries

Solutions

Expert Solution

Please rate the Answer. Thanks and Good luck to You.


Related Solutions

Sweet Construction Company began operations on January 1, 2020. During the year, Sweet Construction entered into...
Sweet Construction Company began operations on January 1, 2020. During the year, Sweet Construction entered into a contract with Lundquist Corp. to construct a manufacturing facility. At that time, Sweet estimated that it would take 5 years to complete the facility at a total cost of $4,517,000. The total contract price for construction of the facility is $6,047,000. During the year, Sweet incurred $1,067,800 in construction costs related to the construction project. The estimated cost to complete the contract is...
Skysong Construction Company began operations on January 1, 2017. During the year, Skysong Construction entered into...
Skysong Construction Company began operations on January 1, 2017. During the year, Skysong Construction entered into a contract with Lundquist Corp. to construct a manufacturing facility. At that time, Skysong estimated that it would take 5 years to complete the facility at a total cost of $4,532,000. The total contract price for construction of the facility is $6,033,000. During the year, Skysong incurred $1,294,800 in construction costs related to the construction project. The estimated cost to complete the contract is...
Vernon Construction Company began operations on January 1, 2019, when it acquired $14,000 cash from the...
Vernon Construction Company began operations on January 1, 2019, when it acquired $14,000 cash from the issuance of common stock. During the year, Vernon purchased $2,500 of direct raw materials and used $2,400 of the direct materials. There were 106 hours of direct labor worked at an average rate of $6 per hour paid in cash. The predetermined overhead rate was $3.00 per direct labor hour. The company started construction on three prefabricated buildings. The job cost sheets reflected the...
Ladora Construction Company began operations on January 1, 2019, when it acquired $30,000 cash from the...
Ladora Construction Company began operations on January 1, 2019, when it acquired $30,000 cash from the issuance of common stock. During the year, Ladora purchased $6,000 of direct raw materials and used $5,640 of the direct materials. There were 108 hours of direct labor worked at an average rate of $20 per hour paid in cash. The predetermined overhead rate was $9 per direct labor hour. The company started construction on three prefabricated buildings. The job cost sheets reflected the...
Problem 2 Harball Company makes skateboards., began operations on January 1, 2019. During the year, the...
Problem 2 Harball Company makes skateboards., began operations on January 1, 2019. During the year, the company made 90,000 skateboards and sold 60,000 skateboards at a sales price of $30 per unit. Production and non-production costs for 2019 are shown in the following table: Production costs     Direct materials $4.00 per unit     Direct labor $5.00 per unit     Variable overhead $3.00 per unit     Fixed overhead $540,000 total Non-production costs     Variable selling and administrative $2 per unit    ...
G corp. began operations in January x1. At the end of the first year G reported...
G corp. began operations in January x1. At the end of the first year G reported $340,000 income before      taxes as financial income. However, they reported $320,000 as taxable income. The $20,000 difference is      due to their use of the accrual method for certain sales for financial reporting purposes and the use of the      installment sale method for those sales for tax purposes.     The marginal tax rate is 34%. A. Record the journal entry to record...
Wingfoot Co. began operations on July 1, 2019. By the end of its first fiscal year,...
Wingfoot Co. began operations on July 1, 2019. By the end of its first fiscal year, ended June 30, 2020, Wingfoot had sold 10,000 wingers. Selected data on operations for the year ended June 30, 2020, follow. (Any balance sheet figures are as at June 30, 2020.) Selling price $100 Wingers produced 18,000 Ending work in process 0 Total manufacturing overhead $15,000 Wage rate $8 per hour Machine hours used 9,000 Wages payable $20,000 Direct materials costs $10 per kilogram...
Trez Company began operations this year. During this first year, the company produced 100,000 units and...
Trez Company began operations this year. During this first year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for this year follows. Sales (80,000 units × $40 per unit) $ 3,200,000 Cost of goods sold Beginning inventory $ 0 Cost of goods manufactured (100,000 units × $20 per unit) 2,000,000 Cost of good available for sale 2,000,000 Ending inventory (20,000 × $20) 400,000 Cost of goods sold 1,600,000 Gross margin 1,600,000 Selling and administrative...
​Randall's Service Company began operations on January​ 1, 2019. The following Trial Balance was prepared on...
​Randall's Service Company began operations on January​ 1, 2019. The following Trial Balance was prepared on December​ 31, 2019. Capital contributions during the year were $56,000. ​Randall's Service Company Trial Balance December​ 31, 2019 Account Title Debit Credit Cash ​$25,400 Accounts Receivable ​5,000 Prepaid Rent ​1,200 Office Supplies ​3,400 Land ​45,000 Building ​16,500 Equipment ​23,000 Accounts Payable ​$15,000 Unearned Revenue ​5,000 Notes Payable ​25,000 Common Stock 56,000 Dividends 6,500 Service Revenue 79,100 Salaries Expense 34,000 Rent Expense 14,000 Office Expense...
Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and...
Sims Company, a manufacturer of tablet computers, began operations on January 1, 2019. Its cost and sales information for this year follows. Manufacturing costs Direct materials $ 35 per unit Direct labor $ 55 per unit Overhead costs Variable $ 40 per unit Fixed $ 6,300,000 (per year) Selling and administrative costs for the year Variable $ 750,000 Fixed $ 5,000,000 Production and sales for the year Units produced 105,000 units Units sold 75,000 units Sales price per unit $...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT