Reference no: EM131109077
(Three Differences, No Beginning Deferred Taxes, Multiple Rates) The following information is available for Rammers Corporation for 2010.
1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $120,000. This difference will reverse in equal amounts of $30,000 over the years 2011-2014.
2. Interest received on municipal bonds was $10,000.
3. Rent collected in advance on January 1, 2010, totaled $60,000 for a 3-year period. Of this amount, $40,000 was reported as unearned at December 31, for book purposes.
4. The tax rates are 40% for 2010 and 35% for 2011 and subsequent years.
5. Income taxes of $320,000 are due per the tax return for 2010.
6. No deferred taxes existed at the beginning of 2010.
(a) Compute taxable income for 2010.
(b) Compute pretax financial income for 2010.
(c) Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2010 and 2011. Assume taxable income was $980,000 in 2011.
(d) Prepare the income tax expense section of the income statement for 2010, beginning with "Income before income taxes."
Prepare the income statement for 2011
: Prepare journal entries to record income taxes in all 4 years. Assume that the change in the tax rate to 40% was not enacted until the beginning of 2011.
|
Determining the concept of duration
: Explain the concept of duration and then comment on the statement,"It is possible that a bond with a shorter maturity than another bond may actually have a longer duration and be more price sensitive to interest rate change."
|
What is the yield to maturity for this bond
: What is the yield to maturity (YTM) for this bond?
|
Describe the business of the firm
: Briefly describe the business of the Firm (i.e. industry segments, geographic service area, market position, and size as measured by revenues, employees, and market capitalisation). Describe the mission statement and strategic objectives of the Fi..
|
Depreciation reported on the tax return exceeded depreciatio
: Depreciation reported on the tax return exceeded depreciation reported on the income statement by $120,000. This difference will reverse in equal amounts of $30,000 over the years 2011-2014.
|
Presentations calls for some kind of preparation
: Even the most superficial of presentations calls for some kind of preparation. An "elevator speech," which summarizes a topic in minutes, if not seconds, calls for lightning thought and reflexive application of the rhetorical triangle, grammar, ou..
|
Find the value of an investment
: Find the value of an investment of $10,000 for 11 years at an annual interest rate of 3.85% compounded continuously.
|
Why does not elaine try to sell more of her product
: Elaine's firm is in a perfectly competitive industry. Why doesn't Elaine try to sell more of her product by lowering its price below the market price? Which of the following is correct when the perfectly competitive firm is producing its long-run e..
|
Explain network fundamental characteristics and components
: Write a 1-page paper that includes the following based on your chosen Local Organization: Explain the network's fundamental characteristics and components.
|