Question

Pretax financial income is $700,000. The tax rate is 20%. Interest received on tax exempt Iowa...

  • Pretax financial income is $700,000. The tax rate is 20%.
  • Interest received on tax exempt Iowa State bonds was $9,000.
  • Machinery was acquired in January for $300,000. Tax depreciation exceeds GAAP depreciation by 40,000.
  • Bosch Co. estimates bad debt expense on 2021 accounts receivable was $20,000. Tax does not deduct the bad debts until an accounts receivable is determined to be uncollectible.

(a)     Prepare a schedule starting with pretax financial income and compute taxable income.

(b)     Prepare the journal entry to record income tax payable, income tax expense, and any deferred taxes for 2021.

please show any work

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. Prior to 2017, taxable income and pretax financial inomce were identical 2.Pretax financial income is...
1. Prior to 2017, taxable income and pretax financial inomce were identical 2.Pretax financial income is $1,700,000 in 2017 and $1,400,000 in 2018 3. On January 1, 2017, equipment costing $1,200,000 is purchased. It is to be depreciated on a straight-line method basis over 5 years for tax purposes and over 8 years for financial reporting purposes. 4. Interest of $60,000 was earned on tax-exempt municipal obligations in 2018. 5. Included in 2018 pretax financial income is a gain on...
The records for Bosch Co. show this data for 2015: Gross profit on installment sales recorded...
The records for Bosch Co. show this data for 2015: Gross profit on installment sales recorded on the books was $420,000. Gross profit from collections of installment receivables was $280,000 for tax purpose. Machinery was acquired in January for $300,000. Straight-line depreciation over a ten-year life (no salvage value) is used for financial reporting. For tax purposes, MACRS depreciation is 42,000 for 2015. Interest received on tax exempt Iowa State bonds was $9,000. Pretax financial income is $600,000. The tax...
USING 2018 CORPORATE TAX RATE OF 21% Harrison Corporation reported pretax book income of $735,000. Tax...
USING 2018 CORPORATE TAX RATE OF 21% Harrison Corporation reported pretax book income of $735,000. Tax depreciation exceeded book depreciation by $605,000. In addition, the company received $240,000 of tax-exempt municipal bond interest. The company’s prior-year tax return showed taxable income of $90,000. Compute the company’s deferred income tax expense or benefit.
Harrison Corporation reported pretax book income of $1,160,000. Tax depreciation exceeded book depreciation by $730,000. In...
Harrison Corporation reported pretax book income of $1,160,000. Tax depreciation exceeded book depreciation by $730,000. In addition, the company received $565,000 of tax-exempt municipal bond interest. The company’s prior-year tax return showed taxable income of $127,000. Compute the company’s deferred income tax expense or benefit Deferred income tax expense=
In gathering information to prepare its 2021 financial statements, a company identified the following book-tax differences:...
In gathering information to prepare its 2021 financial statements, a company identified the following book-tax differences: The company accrued warranty expense of $27,000 on their financial statements but cannot deduct it on their income tax returns until the warranty claims are paid out. The company incurred $44,000 of meal and entertainment expenses during 2021. The company can only deduct 50% of these expenses on their tax returns. The company uses straight-line depreciation for financial accounting and accelerated depreciation for tax...
Harrison Corporation reported pretax book income of $735,000. Tax depreciation exceeded book depreciation by $605,000. In...
Harrison Corporation reported pretax book income of $735,000. Tax depreciation exceeded book depreciation by $605,000. In addition, the company received $240,000 of tax-exempt municipal bond interest. The company’s prior-year tax return showed taxable income of $90,000. Compute the company’s deferred income tax expense or benefit. Deferred income tax expense = The answer is not 4,200 FYI.
Costello Corporation reported pretax book income of $500,900. During the current year, the reserve for bad...
Costello Corporation reported pretax book income of $500,900. During the current year, the reserve for bad debts increased by $6,800. In addition, tax depreciation exceeded book depreciation by $40,900. Finally, Costello received $3,450 of tax-exempt life insurance proceeds from the death of one of its officers. Costello's deferred income tax expense or benefit would be: Multiple Choice $7,851 net deferred tax benefit. $7,161 net deferred tax benefit. $7,886 net deferred tax expense. $7,161 net deferred tax expense.
A reconciliation of pretax financial statement income to taxable income is shown below for Chan Inc....
A reconciliation of pretax financial statement income to taxable income is shown below for Chan Inc. for the year ended December 31, 2021, its first year of operations. The income tax rate is 25%. Pretax accounting income (income statement) $ 500,000 Inventory impairments in excess of deductible amount 40,000 Depreciation in excess of financial statement amount (120,000 ) Taxable income (tax return) $ 420,000 The inventory impairments relate to Chan's Columbian tax return. The depreciation relates to Chan's U.S. tax...
Waterway Company reports pretax financial income of $76,500 for 2020. The following items cause taxable income...
Waterway Company reports pretax financial income of $76,500 for 2020. The following items cause taxable income to be different than pretax financial income. 1. Depreciation on the tax return is greater than depreciation on the income statement by $15,700. 2. Rent collected on the tax return is greater than rent recognized on the income statement by $23,400. 3. Fines for pollution appear as an expense of $10,500 on the income statement. Waterway’s tax rate is 30% for all years, and...
A. Income Taxes The following differences enter into the reconciliation of financial income and taxable income...
A. Income Taxes The following differences enter into the reconciliation of financial income and taxable income of Abbott Company for the year ended December 31, 2017, its first year of operations. The enacted income tax rate is 30% for all years. Pretax financial income $800,000 Excess tax depreciation (480,000) Unearned rent revenue deferred on the books   60,000 but appropriately recognized in taxable income Taxable income $380,000 1. Excess tax depreciation will reverse equally over a four-year period, 2018-2021. 2. Rent...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT