Prepare the journal entry to record income tax expense

Assignment Help Taxation
Reference no: EM13510163

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.

Use the spreadsheetJournal Entries to prepare the journal entry to record income tax expense, deferred taxes, and income taxes payable for 2012.

Draft the income tax expense section of the income statement, beginning with "Income before income taxes"

Reference no: EM13510163

What are the tax consequences of these arrangements

What are the tax consequences of these arrangements under Div 40ITAA97 - Advise Periwinkle of its FBT consequences arising out of the above information, including calculation

Tax return - corporate return? ?background

The Corporation wrote off $10,000 in accounts receivable as uncollectible during the year - regular tax depreciation was $28,000. None of the depreciation should be claimed on

Estimates be appropriate in tax return preparation

Statement on Standards for Tax Services No. 4 states that a CPA may use estimates in completing a tax return. When would using estimates be appropriate in tax return prepara

What tax issues are relevant to really

Another disqualified person has agreed to match this support if Really Welcome will appoint him to the organization's board of directors. What tax issues are relevant to R

Minimize the current years tax liability

Minimize the current years tax liability. That is, they would like to defer income when possible and take the largest deductions possible, a practice they have followed in t

Compute the increase in after tax annual net cash inflow

Alternate problem A Mark's Manufacturing Company is currently using three machines that it bought seven years ago to manufacture its product. Each machine produces 10,000 unit

Prepare a tax memo on these issues

Prepare a tax memo on these issues (no more than four pages), to the tax partner on this engagement, Robert Holder.  You need to read Sections 382 and 108 and the related regu

Baginski steel corporation reported an operating loss

1.During 2013, its first year of operations, Baginski Steel Corporation reported an operating loss of $375,000 for financial reporting and tax purposes. The enacted tax rate i

Reviews

Write a Review

 
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