2. (TCO B) The Accent Corporation shows thefollowinginformation.
On January 1, 2012, Accent purchased a donut machine for$900,000.
A) Pretax financial income is $2,000,000 in 2012 and $2,500,000 in2013.
B) Taxable income is expected in future years with an expected taxrate of 40%.
C) The company recognized an extraordinary gain of $250,000 in 2013(which is fully taxable).
D) Tax-exempt municipal bonds yielded interest of $50,000 in2013.
E) Straight-line basis for 8 years for financial reporting (SeeAppendix 11A.)
F) Half-year convention basis depreciation for 5 yearsfor tax purposes.
Required:
1) Computetaxable income and income taxes payable for 2013.
2) Prepare the journalentries for income tax expense, income taxes payable, and deferredtaxes for 2013.
3) Prepare the deferredincome taxes presentation for December 31, 2013 balance sheet.
2. (TCO B) The Accent Corporation shows thefollowinginformation.
On January 1, 2012, Accent purchased a donut machine for$900,000.
A) Pretax financial income is $2,000,000 in 2012 and $2,500,000 in2013.
B) Taxable income is expected in future years with an expected taxrate of 40%.
C) The company recognized an extraordinary gain of $250,000 in 2013(which is fully taxable).
D) Tax-exempt municipal bonds yielded interest of $50,000 in2013.
E) Straight-line basis for 8 years for financial reporting (SeeAppendix 11A.)
F) Half-year convention basis depreciation for 5 yearsfor tax purposes.
Required:
1) Computetaxable income and income taxes payable for 2013.
2) Prepare the journalentries for income tax expense, income taxes payable, and deferredtaxes for 2013.
3) Prepare the deferredincome taxes presentation for December 31, 2013 balance sheet.