Bandung Corporation began 2014 with a $92,700 balance in the Deferred Tax Liability account. At the end of 2014, the related cumulative temporary difference amounts to $366,700, and it will reverse evenly over the next 2 years. Pretax accounting income for 2014 is $538,100, the tax rate for all years is 40%, and taxable income for 2014 is $403,150. Compute income taxes payable for 2014. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2014.
Bandung Corporation began 2014 with a $92,700 balance in the Deferred Tax Liability account. At the end of 2014, the related cumulative temporary difference amounts to $366,700, and it will reverse evenly over the next 2 years. Pretax accounting income for 2014 is $538,100, the tax rate for all years is 40%, and taxable income for 2014 is $403,150. Compute income taxes payable for 2014. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2014.
Related questions
The following information is available for Windsor Corporation for 2016 (its first year of operations).
| 1, | Excess of tax depreciation over book depreciation, $43,800. This $43,800 difference will reverse equally over the years 2017â2020. | |
| 2. | Deferral, for book purposes, of $18,100 of rent received in advance. The rent will be recognized in 2017. | |
| 3. | Pretax financial income, $302,100. | |
| 4. | Tax rate for all years, 30%. |
a) Compute taxable income for 2016.
Taxable Income $____
b) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2016.
c) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2017, assuming taxable income of $309,200.
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
|
Zekany Corporation would have had identical income beforetaxes on both its income tax returns and income statements for theyears 2013 through 2016 except for differences in depreciation onan operational asset. The asset cost $250,000 and is depreciatedfor income tax purposes in the following amounts: |
| 2013 | $ | 82,500 | |
| 2014 | 110,000 | ||
| 2015 | 37,500 | ||
| 2016 | 20,000 | ||
The operational asset has afour-year life and no residual value. The straight-line method isused for financial reporting purposes. |
Income amounts beforedepreciation expense and income taxes for each of the four yearswere as follows. |
| 2013 | 2014 | 2015 | 2016 | |||||||||
| Accountingincome before taxes and depreciation | $ | 135,000 | $ | 155,000 | $ | 145,000 | $ | 145,000 | ||||
Assume the average and marginal income tax rate for 2013and 2014 was 30%; however, during 2014 tax legislation was passedto raise the tax rate to 40% beginning in 2015. The 40% rateremained in effect through the years 2015 and 2016. Both theaccounting and income tax periods end December 31. |
| Required: |
Prepare the journal entries to record income taxes for theyears 2013 through 2016. (If no entry is required for aparticular transaction, select "No journal entry required" in thefirst account field.) |
