+1-415-670-9189
info@expertsmind.com
Johnny bravo company began operations in 2012
Course:- Accounting Basics
Reference No.:- EM13149041




Assignment Help
Assignment Help >> Accounting Basics

Ruby Kyle

ACT360  Module 3 Critical Thinking

Complete the following exercise. Submit journal entries in an Excel file and written segments in an MS Word document. Label each question clearly. For written answers, please make sure your responses are well-written, formatted per CSU-Global guidelines for APA Style, and have proper citation(s), if needed.

Johnny Bravo Company began operations in 2012 and has provided the following information.

1. Pretax financial income for 2012 is $100,000.
2. The tax rate enacted for 2012 and future years is 40%.
3. Differences between the 2012 income statement and tax return are listed below.

(a) Warranty expense accrued for financial reporting purposes amounts to $5,000. Warranty deductions
per the tax return amount to $2,000.
(b) Gross profit on construction contracts using the percentage-of-completion method for book purposes
amounts to $92,000. Gross profit on construction contracts for tax purposes amounts to $62,000.
(c) Depreciation of property, plant, and equipment for financial reporting purposes amounts to $60,000.
Depreciation of these assets amounts to $80,000 for the tax return.
(d) A $3,500 fine paid for violation of pollution laws was deducted in computing pretax financial income.
(e) Interest revenue earned on an investment in tax-exempt municipal bonds amounts to $1,400.

4. Taxable income is expected for the next few years.

  1. Use the spreadsheet Journal Entries to prepare the journal entry to record income tax expense, deferred taxes, and income taxes payable for 2012.
  2. Draft the income tax expense section of the income statement, beginning with "Income before income taxes"

 

 

 




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Accounting Basics) Materials
Direct materials are placed into the process at the beginning of production. Determine the number of equivalent units of production with respect to direct matrials and conve
Godert pharmaceutical company has many scientists working in the labs trying to develop anti-aging drug. The cost of this research and development should be.
MBA 521 What is capital budgeting? What are the steps in a typical capital budgeting process and what is project free cash flow? What are the factors included in determining
A particular common stock has an annual cash dividend of $2 per share and is predicted to have a market value of $30 per share 5 years from now. Assuming a discount rate of
Contrast the advantages and disadvantages of the direct and indirect methods of preparing the statement of cash flows. Are both methods acceptable? Which method is preferred b
(FIFO and LIFO) Harrisburg Company is considering changing its inventory valuation method from FIFO to LIFO because of the potential tax savings. However, the management wis
HA2042ACCOUNTING INFORMATION SYSTEMS ASSIGNMENT. Determine the systems requirements, What are some of the possible software features or functionalities that the firm should c
USACo adjusted basis in the equipment is $10,000 on the date of sale. what is the source of the $340,000 gain on the sale of the equipment?