Prepare journal entries to record income taxes

Assignment Help Accounting Basics
Reference no: EM132014009

Problem - (One Temporary Difference, Tracked for 4 Years, One Permanent Difference, Change in Rate) The pretax financial income of Truttman Company differs from its taxable income throughout each of 4 years as follows.

Pretax Taxable

Year Financial Income Income Tax Rate

2014 $290,000 $180,000 35%

2015 320,000 225,000 40%

2016 350,000 260,000 40%

2017 420,000 560,000 40%

Pretax financial income for each year includes a nondeductible expense of $30,000 (never deductible for tax purposes). The remainder of the difference between pretax financial income and taxable income in each period is due to one depreciation temporary difference. No deferred income taxes existed at the beginning of 2014.

Instructions -

(a) 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 2015.

(b) Prepare the income statement for 2015, beginning with Income before income taxes.

Reference no: EM132014009

Questions Cloud

Problems that can be corrected by lasik : Describe one of the vision problems that can be corrected by LASIK. Discuss how this problem affects the physiology vision and how LASIK
Prepare a schedule starting with pretax financial income : Question - Permanent and Temporary Differences, One Rate - Prepare a schedule starting with pretax financial income in 2014 and ending with taxable income
Problems that can be corrected by lasik : Pick one of the vision problems that can be corrected by LASIK. Discuss how this problem affects the physiology vision and how LASIK can be used to correct.
Will you continue with the hardware previously chosen : Initech was looking at the proposal and realized that you are 30% over budget, which was not made known to you until now.
Prepare journal entries to record income taxes : 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 2015
Study of biomolecules : How should you monitor your food intake to insure the cells in your body have the materials necessary to function?
Determine the benefits of visually displaying your data : From the dataset you chose, choose one categorical and one continuous variable and perform the appropriate visual display for each variable.
Develop a specification for the new system : CIS5302 - Case Study: Neetas Unforgettable Weddings - You have been hired as a Business Analysis by Neeta to develop a specification for the new system
Textbook discussion on bpa : Quick search on Bisphenol A (BPA). Based on the findings in your search and the textbook's discussion on BPA, what are your thoughts on the safety of BPA

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd