Beck-Curry Associates reported the following income information for the 2019-2021 period:
|
Year |
Reported Income (Loss) |
|
2019 |
($1,200,000) |
|
2020 |
$500,000 |
|
2021 |
$580,000 |
The company does not have any book-tax differences and is subject to a 21% income tax rate. Beck-Curry is filing a US Corporate Income Tax Return.
Required:
a. Prepare the journal entry to record the 2019 income tax provision.
b. Prepare the journal entry to record the 2020 income tax provision.
c. Prepare the journal entry to record the 2021 income tax provision.
d. Determine the balance of the deferred tax asset at the end of 2021.
e. Assume that a newly enacted tax law increases the income tax rate to 25% on January 2, 2022. Prepare the journal entry to record the effects of the tax rate change.
In: Accounting
company manufactures two products, A and B. Both products utilise the same material and require skilled labour. Materials and skilled labour are the only variable costs. Product details are as follows:
A B
£ £
Selling price 24 30
Material costs 5 10
Skilled labour costs 16 16
Materials cost £5 per kg. Skilled labour costs £8 per hour. For the month of May 2020 maximum expected demand is for 1,000 units of A and 1,500 units of B. In May 2020 there is expected to be a restriction on the availability of both material and skilled labour. There are 4,500 kgs. of Material available and 4,500 hours of skilled labour.
To maximise expected contribution how much A and B should be produced?
A.
1,000 A
1,250 B
B.
750 A
1,500 B
C.
1,000 A
1,500 B
D.
none of the
In: Finance
E19.22 (LO1,4) (Two Differences, One Rate, First Year) The differences between the book basis and tax basis of the assets and liabilities of Morgan Corporation at the end of 2019 are presented below.
| Book Basis | Tax Basis | |
| Accounts receivable | $50,000 | $–0– |
| Litigation liability | 20,000 | –0– |
It is estimated that the litigation liability will be settled in 2020. The difference in accounts receivable will result in taxable amounts of $30,000 in 2020 and $20,000 in 2021. The company has taxable income of $300,000 in 2019 and is expected to have taxable income in each of the following 2 years. Its enacted tax rate is 34% for all years. This is the company's first year of operations.
Instructions
a. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2019.
b. Indicate how deferred income taxes will be reported on the statement of financial position at the end of 2019.
In: Accounting
In: Accounting
South Bay Boating Company (South) sells to its customers under the terms Free On Board (FOB) Destination. One of its customers is West Shore Marine (West). On December 28, 2019 South sells to West a 25-foot pontoon boat for $29,750. The 25-foot pontoon boat arrives at West on January 4, 2020. The transportation and insurance costs total $3,124.
Requirements:
On what date can South record the sale as income?
Which company has to pay the transportation and insurance costs?
On what date can West record the boat in their inventory?
In: Accounting
Problem 1
Company: XYZ Company
Date of bonds: January 1, 2019
Term: 4 years
Face (Par) Value: $1,000
Stated interest rate: 10%
Effective interest rate: 12%
Interest payment dates on January 1 and July 1
In: Accounting
Problem 1
Company: XYZ Company
Date of bonds: January 1, 2019
Term: 4 years
Face (Par) Value: $1,000
Stated interest rate: 10%
Effective interest rate: 12%
Interest payment dates on January 1 and July 1
In: Accounting
Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows: Indirect labor $1.00 Indirect materials 0.50 Utilities 0.30 Fixed overhead costs per month are Supervision $4,400, Depreciation $1,100, and Property Taxes $900. The company believes it will normally operate in a range of 7,500–10,500 direct labor hours per month. Prepare a monthly manufacturing overhead flexible budget for 2020 for the expected range of activity, using increments of 1,000 direct labor hours
In: Accounting
In: Accounting
Venezuela Inc. issued $2,000,000 5-year bonds at 9%. These bonds were issued on January 1, 2017 and pay interest on January 1 and July 1. The YTM of the bond is 11%, i.e. the effective interest rate for the company is 11%.
a. Calculate the value of the bonds and prepare the journal entry to record the issuance of the bonds on January 1, 2017.
b. Prepare a bond amortization schedule up to and including January 1, 2022.
c. Assume that on July 1, 2020, the company retires half of the bonds by calling them back at 102%. Prepare the journal entry to record this retirement.
In: Accounting