Question
In: Accounting
2019 is the first year of operation for Flitz Company. Applicable tax rates enacted by the...
2019 is the first year of operation for Flitz Company. Applicable tax rates enacted by the end of 2018 are as follows:2019 25%2020 20%2021 and later 30%Compute the amount of deferred taxes to appear on the balance sheet at 12/31/19 with proper classifications, prepare the journal entry to record income tax expense for 2019, and show the current and deferred portions of income tax expense on the income statement for 2019.(a) In 2019 Flitz had pre-tax financial income of $450,000.(b) Pre-tax financial income was different from taxable income due to the following:Depreciation, the straight-line method for financial purpose while MACRS is used for tax purpose 35,000(tax-deductible in 2019, expense in 2020 20,000 in 2021 15,000)Fine for pollution 8,000(not tax-deductible, expense in 2019) Revenue received in advance 14,000(taxable 2019, revenue in 2020)Revenue from investment on equity method for financial purpose and cost method is used for tax purpose 10,000(revenue in 2019, taxable in 2020) Litigation accrual 80,000(expense in 2019, tax-deductible in 2022)Interest received on municipal bonds 6,000(revenue in 2019, not taxable)
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Johnsn and Hill formed a company, and 2018 was their first year of operation. a) To...
Johnsn and Hill formed a company, and 2018 was their first year
of operation.
a) To establish Johnson & Hill each contributed a total of
$55,000 in exchange for common stock.
b) Johnson & Hillt specializes in high-end parties. The
first year they conducted 96 events and revenue for the first year
amounted to $480,000, of which 95% was to be paid by the date of
the event and the remainder due within 30 days of the event
c) Clients...
Johnsn and Hill formed a company, and 2018 was their first year of operation. a) To...
Johnsn and Hill formed a company, and 2018 was their first year
of operation.
a) To establish Johnson & Hill each contributed a total of
$55,000 in exchange for common stock.
b) Johnson & Hillt specializes in high-end parties. The
first year they conducted 96 events and revenue for the first year
amounted to $480,000, of which 95% was to be paid by the date of
the event and the remainder due within 30 days of the event
c) Clients...
KGB Security Ltd provides the following information at 30 June 2019 (the first year of operation...
KGB Security Ltd provides the following information at 30 June
2019 (the first year of operation of the company)
Statement of Financial Position (Balance
Sheet)
As at 30 June 2019
Assets
$000
Liabilities and owner’s equity
$000
Prepayments
20
Provision for Annual Leave
90
Accounts Receivable
360
Loan
320
Allowance for Bad Debts
(40)
Share Capital
1,600
Inventory
600
Retained Earnings
330
Plant and Equipment
1,800
Accum
Depreciation
(400)
2,340
2,340
Other Information:
For the year ended 30 June 2019...
The following transactions apply to Jova Company for Year 1, the first year of operation:
The following transactions apply to Jova Company for Year 1, the first year of operation:
Issued $19,000 of common stock for cash.
Recognized $219,000 of service revenue earned on account.
Collected $171,900 from accounts receivable.
Paid $134,000 cash for operating expenses.
Adjusted the accounts to recognize uncollectible accounts expense. Jova uses the allowance method of accounting for uncollectible accounts and estimates that uncollectible accounts expense will be 1 percent of sales on account.
The following transactions apply to Jova for...
Johnsn and Hill formed a company, and 2018 was their first year of operation. To establish...
Johnsn and Hill formed a company, and 2018 was their
first year of operation.
To establish Johnson & Hill each contributed a total of
$60,000 in exchange for common stock.
Johnson & Hill specializes in high-end parties. The first
year they conducted 94 events and revenue for the first year
amounted to $480,000, of which 95% was to be paid by the date of
the event and the remainder due within 30 days of the event.
Clients owe $16,000 at...
The following transactions apply to Jova Company for Year 1, the first year of operation: Issued...
The following transactions apply to Jova Company for Year 1, the
first year of operation: Issued $16,000 of common stock for cash.
Recognized $64,000 of service revenue earned on account. Collected
$57,200 from accounts receivable. Paid operating expenses of
$36,200. Adjusted accounts to recognize uncollectible accounts
expense. Jova uses the allowance method of accounting for
uncollectible accounts and estimates that uncollectible accounts
expense will be 2 percent of sales on account. The following
transactions apply to Jova for Year 2:...
The following transactions apply to Jova Company for Year 1, the first year of operation: Issued...
The following transactions apply to Jova Company for Year 1, the
first year of operation:
Issued $14,000 of common stock for cash.
Recognized $214,000 of service revenue earned on account.
Collected $166,400 from accounts receivable.
Paid $129,000 cash for operating expenses.
Adjusted the accounts to recognize uncollectible accounts
expense. Jova uses the allowance method of accounting for
uncollectible accounts and estimates that uncollectible accounts
expense will be 2 percent of sales on account.
The following transactions apply to Jova for...
The following transactions apply to Jova Company for Year 1, the first year of operation: Issued...
The following transactions apply to Jova Company for Year 1, the
first year of operation:
Issued $17,500 of common stock for cash.
Recognized $62,500 of service revenue earned on account.
Collected $56,000 from accounts receivable.
Paid operating expenses of $36,800.
Adjusted accounts to recognize uncollectible accounts expense.
Jova uses the allowance method of accounting for uncollectible
accounts and estimates that uncollectible accounts expense will be
2 percent of sales on account
The following transactions apply to Jova for Year 2...
The following transactions apply to Jova Company for Year 1, the first year of operation: Issued...
The following transactions apply to Jova Company for Year 1, the
first year of operation:
Issued $15,500 of common stock for cash.
Recognized $64,500 of service revenue earned on account.
Collected $57,600 from accounts receivable.
Paid operating expenses of $36,000.
Adjusted accounts to recognize uncollectible accounts expense.
Jova uses the allowance method of accounting for uncollectible
accounts and estimates that uncollectible accounts expense will be
2 percent of sales on account.
The following transactions apply to Jova for Year 2:...
Wang Company provides the following information for their first year of operation: Sales 5,00
Wang Company provides the following information for their first
year of operation:
Sales 5,000
units @
$10 Variable
production costs per unit:
SG&A
costs: Direct
materials $2
Fixed $1,000 Direct
labor
$2
Variable $1
per
unit Var
MOH $1
Fixed
MOH $7,500 Production 7,500
units
(T or F) If Wang uses variable costing, operating
income will be $11,500.
True
False
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