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A company reports pretax accounting income of $10 million,
but because of a single temporary difference, taxable income is only $7
million. No temporary differences existed at the beginning of the year, and the
tax rate is 40%.
Prepare
the appropriate journal entry to record income taxes
16-3,
A company reports pretax accounting income of $10 million,
but because of a single temporary difference, taxable income is $12 million. No
temporary differences existed at the beginning of the year, and the tax rate is
40%.
Prepare
the appropriate journal entry to record income taxes.
Shannon
Polymers uses straight-line depreciation for financial reporting purposes for
equipment costing $800,000 and with an expected useful life of four years and no
residual value. For tax purposes, the deduction is 40%, 30%, 20%, and 10% in
those years. Pretax accounting income the first year the equipment was used was
$900,000, which includes interest revenue of $20,000 from municipal bonds.
Other than the two described, there are no differences between accounting
income and taxable income. The enacted tax rate is 40%.
Prepare
the journal entry to record income taxes
AirParts Corporation reported an operating loss of $25
million for financial reporting and tax purposes. Taxable income last year and
the previous year, respectively, was $20 million and $15 million. The enacted
tax rate each year is 40%.
Prepare
the journal entry to recognize the income tax benefit of the operating loss.
AirParts elects the carryback option
