Chapter 16
Q1 (12 pts.)
Weatherly Company reported the following results for theyear ended December 31, 2013, its first year ofoperations:
Income (per books before income taxes) $3,300,000
Taxableincome 4,450,000
The disparity between book income and taxable income isattributable to a temporary difference which will reverse in 2014.Assume that the enacted tax rates in effect are 35% in 2013 and 30%in 2014?
1.1 (3pts) Does this temporary differenceresult in a Deferred Tax Asset or Liability? Also, please indicatethe amount.
Amount
Or
Amount
DTA
DTL
1.2 (1pt) Please indicate the amount of incometax payable.
1.3 (4pt) Record the tax journalentry.
1.4 (4pt) List the last three lines on theincome statement
Account or subtotal
Amount
1.5 (4pt) Extra Credit
Effective Tax Rate
Explain in about 10 words why the effective tax rate is neither30% nor 35%
Chapter 16
Q1 (12 pts.)
| Weatherly Company reported the following results for theyear ended December 31, 2013, its first year ofoperations: Income (per books before income taxes) $3,300,000 Taxableincome 4,450,000 The disparity between book income and taxable income isattributable to a temporary difference which will reverse in 2014.Assume that the enacted tax rates in effect are 35% in 2013 and 30%in 2014? | ||||||||||||||||||
| 1.1 (3pts) Does this temporary differenceresult in a Deferred Tax Asset or Liability? Also, please indicatethe amount.
1.2 (1pt) Please indicate the amount of incometax payable. 1.3 (4pt) Record the tax journalentry. 1.4 (4pt) List the last three lines on theincome statement
1.5 (4pt) Extra Credit
|
