At the beginning of 2016, Norris Company had a deferred tax liability of $6,300, because of...

At the beginning of 2016, Norris Company had a deferred tax liability of $6,300, because of the use of MACRS depreciation for income tax purposes and units-of-production depreciation for financial reporting. The income tax rate is 30% for 2015 and 2016, but in 2015 Congress enacted a 38% tax rate for 2017 and future years. Norris’s accounting records show the following pretax items of financial income for 2016: income from continuing operations, $122,300 (revenues of $353,300 and expenses of $231,000); gain on disposal of Division F, $23,000; loss from operations of discontinued Division F, $10,200; and prior period adjustment, $15,200, due to an error that understated revenue in 2015. All of these items are taxable; however, financial depreciation for 2016 on assets related to continuing operations exceeds tax depreciation by $4,000. Norris had a retained earnings balance of $160,900 on January 1, 2016, and declared and paid cash dividends of $33,600 during 2016. Required: 1. Prepare Norris’s income tax journal entry at the end of 2016. 2. Prepare Norris’s 2016 income statement. 3. Prepare Norris’s 2016 statement of retained earnings. 4. Show the related income tax disclosures on Norris’s December 31, 2016, balance sheet.

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At the beginning of 2016, Norris Company had a deferred tax liability of $6,400, because of...

At the beginning of 2016, Norris Company had a deferred tax liability of $6,400, because of the use of MACRS depreciation for income tax purposes and units-of-production depreciation for financial reporting. The income tax rate is 30% for 2015 and 2016, but in 2015 Congress enacted a 37% tax rate for 2017 and future years. Norris’s accounting records show the following pretax items of financial income for 2016: income from continuing operations, $119,300 (revenues of $351,000 and expenses of $231,700);...

At the beginning of 2016, Norris Company had a deferred tax liability of $6,600, because of...

At the beginning of 2016, Norris Company had a deferred tax liability of $6,600, because of the use of MACRS depreciation for income tax purposes and units-of-production depreciation for financial reporting. The income tax rate is 30% for 2015 and 2016, but in 2015 Congress enacted a 39% tax rate for 2017 and future years. Norris’s accounting records show the following pretax items of financial income for 2016: income from continuing operations, $120,000 (revenues of $353,200 and expenses of $233,200);...

At the beginning of 2016, Norris Company had a deferred tax liability of $6,400, because of...

At the beginning of 2016, Norris Company had a deferred tax liability of $6,400, because of the use of MACRS depreciation for income tax purposes and units-of-production depreciation for financial reporting. The income tax rate is 30% for 2015 and 2016, but in 2015 Congress enacted a 39% tax rate for 2017 and future years. Norris’s accounting records show the following pretax items of financial income for 2016: income from continuing operations, $121,600 (revenues of $353,400 and expenses of $231,800);...

Robinson Company had a net deferred tax liability of $34,000 at the beginning of the year,...

Robinson Company had a net deferred tax liability of $34,000 at the beginning of the year, representing a net taxable temporary difference of $100,000 (taxed at 34%). During the year, Robinson reported pretax book income of $400,000. Included in the computation were favorable temporary differences of $50,000 and unfavorable temporary differences of $20,000. During the year, Congress reduced the corporate tax rate to 21%. Robinson's deferred income tax expense or benefit for the current year would be: Net deferred tax...

What is the impact on deferred tax asset and deferred tax liability if a company records...

What is the impact on deferred tax asset and deferred tax liability if a company records accelerated depreciation for tax purposes and straight-line depreciation for book purposes?

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.

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

Exercise 18-23 At the end of 2016, Concord Corporation reported a deferred tax liability of $43,000....

Exercise 18-23 At the end of 2016, Concord Corporation reported a deferred tax liability of $43,000. At the end of 2017, the company had $245,000 of temporary differences related to property, plant, and equipment. Depreciation expense on this property, plant, and equipment has been lower than the CCA claimed on Concord’s income tax returns. The resulting future taxable amounts are as follows: 2018 $79,000 2019 63,000 2020 56,000 2021 47,000 $245,000 The tax rates enacted as of the beginning of...

Information related to various financial statement elements is provided for three cases: Case A Tax expense was $341,400. The deferred tax liability had an...

Information related to various financial statement elements is provided for three cases:Case A Tax expense was $341,400. The deferred tax liability had an opening balance of $92,000 and a closing balance of $103,000. Income tax payable declined by $22,400 during the year.Case B Interest expense was $174,000. Discount amortization was $10,000 during the year. Interest payable had an opening balance of $11,000 and a closing balance of $13,400.Case C Interest revenue was $87,000. Interest receivable had an opening balance of...

1. Deferred tax liability, January 1, 2017, $70,200. 2. Deferred tax asset, January 1, 2017, $23,400....

1. Deferred tax liability, January 1, 2017, $70,200. 2. Deferred tax asset, January 1, 2017, $23,400. 3. Taxable income for 2017, $122,850. 4. Cumulative temporary difference at December 31, 2017, giving rise to future taxable amounts, $269,100. 5. Cumulative temporary difference at December 31, 2017, giving rise to future deductible amounts, $111,150. 6. Tax rate for all years, 40%. No permanent differences exist. 7. The company is expected to operate profitably in the future. Compute the amount of pretax financial...

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At the beginning of 2016, Norris Company had a deferred tax liability of $6,300, because of...

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At the beginning of 2016, Norris Company had a deferred tax liability of $6,400, because of...

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1. Deferred tax liability, January 1, 2017, $70,200. 2. Deferred tax asset, January 1, 2017, $23,400....