Question
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 | $244,000 |
| 2016 | 279,000 |
| 2017 | 327,000 |
When calculating income, Wyhowski deducted depreciation on plant equipment. The equipment was purchased January 1, 2015, at a cost of $101,000. The equipment is expected to last three years and have a(n) $8,000 salvage value. Wyhowski uses straight-line depreciation for book purposes. For tax purposes, depreciation on the equipment is $58,000 in 2015, $23,000 in 2016, and $12,000 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 | $fill in the blank 1 |
| 2016 | $fill in the blank 2 |
| 2017 | $fill in the blank 3 |
2. How much income tax expense did Wyhowski record each year?
| Year | Income Tax Expense |
| 2015 | $fill in the blank 4 |
| 2016 | $fill in the blank 5 |
| 2017 | $fill in the blank 6 |
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 | $fill in the blank 7 | Credit |
| 2016 | $fill in the blank 9 | Credit |
| 2017 | $fill in the blank 11 | No balance |
Solutions
Expert Solution
| Part-1 | |
| Year | Tax Paid |
| 2015 | $75,950.00 |
| 2016 | $100,450.00 |
| 2017 | $121,100.00 |
| Part-2 | |
| Year | Tax Expense |
| 2015 | $85,400.00 |
| 2016 | $97,650.00 |
| 2017 | $114,450.00 |
| Part-3 | ||
| Year | Debit or Credit | Amount |
| 2015 | Credit | $9,450.00 |
| 2016 | Debit | $6650 |
| 2017 | Nil Balance | 0 |
Detail working Note for your easy understanding
| Working Note: Wyhowski Inc. | |||
| 2015 | 2016 | 2017 | |
| Incomebefore tax (a) | $244,000.00 | $279,000.00 | $327,000.00 |
| Add: Depreciaiton as per Books | $31,000.00 | $31,000.00 | $31,000.00 |
| Less: Deprecoation as per Tax | $58,000.00 | $23,000.00 | $12,000.00 |
| Taxable Income (b) | $217,000.00 | $287,000.00 | $346,000.00 |
| Income Tax Payable (b*35%) | $75,950.00 | $100,450.00 | $121,100.00 |
| Incoem Tax Expensse (a*35%) | $85,400.00 | $97,650.00 | $114,450.00 |
| Deferred Income tax Expense | $9,450.00 | -$2,800.00 | -$6,650.00 |
| Working Note | |
| Depreciaiton as per SLM= (101000-8000)/3=$31000 |
ekkarill92 answered 1 year 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:
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2016
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2017
528,000
When calculating
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equipment is expected to last three years and have a(n) $14,000
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