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

Ask Question & Get Answers from Experts
Browse some more (Accounting Basics) Materials
If 30% of the month's revenue is collected in the same month, 40% is collected in the second month and 30% is collected in the third month, how much of September's revenue i
(Future Value): To what amount will $4,800 invested for 10 years at 11 percent compounded annually accumulate?$4,800 invested for 10 years at 11 percent will accumulate to $__
What is investors' required return on the stock assuming constant growth - What are these bonds yielding - Calculate the tax burden for a company with $11,000,000 in pretax e
Quayle Corporation reports net income of $380,000 and a weighted average of 200,000 shares of common stock outstanding for the year. Compute the earnings per share of common s
Analysis of heart sounds enables a number of dysfunctions in the blood circulation system to be investigated. Heart sounds are recorded by acoustic sensors placed on the che
According to the Normal model N(0.024, 0.056) describing mutual fund returns in the 4th quarter of 2007 in Exercise 21, what percent of this group of funds would you expect
In a two page report (12 pt font, double-spaced), research and discuss your findings regarding the role of motor carriers and advances made in the 21st century from an econo
Larry Smith, president of Smith Company, has instructed Ron Rivera, the head of the accounting department for Smith Company, to report the company's land in the company's acco