You, are the senior auditor assigned to the True Ltd. audit file. You are reviewing Truestar’s financial statements and note that the only items included on True’s balance sheet that have temporary differences for future income taxes are: intangible assets relating to deferred development costs of $20,000, a leased asset of $80,000, and a lease obligation of $69,000. True’s tax rate is 20% and the company uses the future income tax method to account for income taxes. At the end of last year, True’s future income tax liability was $7,000. Calculate True’s future tax e
Q: Ms. Cruz, a licensed real estate broker obtained a net listing of P6,500,000.00. She sold the…
A: Rate of Capital gain = 6% commission = 5% documentary stamps = 1.5% total of extra amount charged…
Q: Use the adjusted trial balance for Stockton Company to answer the question that follows. Stockton…
A: Trial Balance: Trial balance is a statement in which closing balance of all ledger accounts are…
Q: QS 25-20 (Algo) Special offer pricing LO P7 Radar Company sells bikes for $520 each. The company…
A: The special offer can be accepted if the company has left with the required production capacity…
Q: The Fisher Apparel Company balance sheet for the year ended Year 1 is as follows: December 31, Year…
A: Disclaimer: “Since you have posted a question with multiple sub-parts, we will solve the first three…
Q: Old Bay Rum from Guyana enters into a sales contract to sell beer to the Ontarlo Liquor Board. The…
A: ANSWER : The correct Answer : The contract contains: a mutual mistake
Q: Huskey Mining Corporation issued bonds with a par value of $94,000 on January 1, 2023 The annual…
A: The amount that belongs in the balance sheet for the bonds is the carrying value of the bonds. It…
Q: Assume a company had net income of $61,000. It provided the following excerpts from its balance…
A: Solution... Cash provided by operating activities:
Q: Canova Corporation adopted the dollar-value LIFO retail method on January 1, 2024. On that date, the…
A: LIFO stands for Last in Last out, this method of inventory management states that the inventory…
Q: The Hopewell Pharmaceutical Company’s balance sheet and income statement for last year are as…
A: The cash conversion cycle is the method used by the management in determining the time to taken in…
Q: Pesto Corporation acquired 80 percent of Sauce Corporation's common stock on January 1, 20X7, for…
A: A consolidated balance sheet is a document that, without dividing the companies, compiles all of the…
Q: 2. You, are the senior auditor assigned to the True Ltd. audit file. You are reviewing Truestar’s…
A: Deferred tax asset: The deferred tax asset is created when the taxes to be paid as per income tax…
Q: Tamarisk Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items.…
A: ANSWER LCNRV = Lower of Cost or Net Realizable Value The formula to find, NRV= Estimated selling…
Q: , or B) 50% chance jority chose option to wir B. This
A: In option (A) there is 100% certainty of losses. And no chances of gains. in option (B) there are…
Q: Ali Baba Tours uses a perpetual inventory system. Selected transactions for the month of July are…
A: FIFO states that the inventory that is purchased first by the company would be sold first. Whereas,…
Q: If a municipality files for bankruptcy, how does this happen, and what is the sequence of events…
A: The sequence of events leading up to a municipality filing for bankruptcy typically begins with a…
Q: Crane Ltd. reported the following for the fiscal year 2021: Sales Cost of goods sold Gross profit…
A:
Q: The IASB's Conceptual Framework sets out the concepts that underlie the preparation and presentation…
A: Financial Statement - Financial statements are official records of a company, an individual, or…
Q: Prepare budgeted income statements for each of the months of January, February, and March that show…
A: The income statement tells about the profitability of the business for the current period. The net…
Q: The rates offered by a bank on deposits between $10,000 and $24,999 are shown in the following…
A: Answer The interest rate will be same which it had on 180 to 269 day ( renewal day ) Both…
Q: Suppose Caterpillar's defined-benefit pension plan offers a retirement benefit tied to years of…
A: A defined benefit plan seems to be a form of pension scheme that promises a lifelong payout when the…
Q: How bankruptcy can be initiated and what are the available alternatives to it?
A: Bankruptcy is one of the most dreaded words in the financial world. It is a situation where an…
Q: Evan enters into a contract with Right Construction Ltd. for the construction of a wine cellar. The…
A: Explanation : The principle of privity of contracts is a legal principle that generally holds that…
Q: 2 An amount of $45,560 will provide 9 years of payments of $1,776.80 at the end of every 3…
A: Periodic payments from the annuity carry the payment for interest rate and payment for principal…
Q: Kiddie World uses a periodic inventory system and the retail inventory method to estimate ending…
A: The company keeps inventory for the purpose of sale. Inventory is Assets for the company. The…
Q: Mountain Gear has been using the same machines to make its name-brand clothing for the last five…
A: Cost-effectiveness analysis is a way to examine both the costs and health outcomes of one or more…
Q: Piedmont Company segments its business into two regions-North and South. The company prepared the…
A: Break-even point is point where there is no profit or loss. Thus, it is a point where the…
Q: Ambrosia has an annual salary of $75,000. She contributes 25% of her pre-tax income to her 401(k),…
A: Calculation of Ambrosia’s approximate annual take-home pay after all deductions have been made…
Q: (D) $1,024.33
A: The Correct option is D) $1024.33 Detailed Explanations is here as fallows below: Vlad Annual Salary…
Q: 4. On April 1, 2021, Bleta Corp purchases a call option for $500, which gives Beta the right to buy…
A: The Correct Solution is : a. No entry required
Q: Robert and John are married and have 4 dependent children and earn a gross biweekly salary of…
A: Tax liability: Tax liability is the total amount of taxes that a person or business owes to the…
Q: Which of the following accounts does NOT belong to the group? O Freight Out Sales Commission Expense…
A: The expenses incurred to storw and sell the products are said to be selling and administrative…
Q: KF2. A conventional mortgage purchased by FNMA requires all of the following except * A strong…
A: When buying property, a conventional loan is a readily available option from most lenders. They are…
Q: A CPA firm that provides audit services for a client generally cannot provide expert witness…
A: The auditor is prohibited from providing the following non-audit services to an audit client…
Q: Concordia Corporation has 96,900 common shares that have been issued. It declares a 4% stock…
A: The share dividend is declared on the basis of market value of shares on declaration date. The share…
Q: All of the following statements are stated in Brazil reals (R$). Bralta Ltd. Statement of Financial…
A: The answer for the multiple choice question and relevant working are presented hereunder : The Total…
Q: Discuss 5 accountant roles in information system design
A: With the changing face of technology their has been significant safe in the accountant role that is…
Q: Liam & Co. imported raw materials from abroad worth £ 100,000. They paid £ 8,000 as import duties.…
A: Introduction:- The cost of inventories includes all costs of purchase, costs of conversion and other…
Q: Gena Manufacturing Company has a fixed cost of $239,000 for the production of tubes. Estimated sales…
A: Contribution margin is the amount of difference between the sales amount and the variable costs. It…
Q: Please offer a number of arguments to justify Uzbekistan adopting a policy of universal insurance.…
A: 1. Adverse Selection: Universal insurance would help mitigate the problem of adverse selection by…
Q: Lyle Corp. is a distributor of pharmaceuticals and sells only to retail drug stores. During 2021,…
A: A charitable donation is a present of coins or belongings made to a nonprofit agency to assist it…
Q: You have been hired by Johnson and Johnson Corp. this year. Your supervisor approaches you and need…
A: “Since you have posted a question with multiple sub parts, we will provide the solution only to the…
Q: 1 Jonkin plc are considering a project that is susceptible to risk. An ini investment of £1,300,000…
A: NPV is the net present value which means = Present value of cash inflows - Present value of cash…
Q: how would you recognize your company’s assets that were acquired with the intention of generating…
A: Balance sheet shows the financial position of the company. It shows the assets, liabilities, and…
Q: A lead bookkeeper in Teresa's firm recently retired. How does Teresa update the lead for the client…
A: Quickbooks refers to software used for tracking and organizing financial information for clients…
Q: current year, Stone received the following interest payments Interest of $400 on the refund of her…
A: Interest are Income earned on investment that are done it can be in the bond or other security in…
Q: A fire destroyed a warehouse of the Goren Group, Incorporated, on May 4, 2024. Accounting records on…
A: The ending inventory can be calculated by deducting the cost of goods sold from the cost of goods…
Q: Mr. Samson hired the services of a broker to sell his property. The owner said he bought it at…
A: The cost price is given So Gross profit is calculated on the cost price in the given question so the…
Q: Assume a company’s balance sheet showed beginning and ending balances in the Long-Term Investments…
A: Ending balance of investments = Beginning balance + Purchases - Investments sold Purchases = Ending…
Q: A corporation has the following stock issued and outstanding: . Common stock, $1 par value, 10,000…
A: When the share are issued at price higher than par value of each share , then additional paid in…
Q: Good Hope Corporation Worksheet for the month ended November 30, 2022
A: Statement of financial position presents all the assets, liabilities and stockholders' equity of a…
Ma3.
You, are the senior auditor assigned to the True Ltd. audit file. You are reviewing Truestar’s financial statements and note that the only items included on True’s balance sheet that have temporary differences for future income taxes are: intangible assets relating to deferred development costs of $20,000, a leased asset of $80,000, and a lease obligation of $69,000. True’s tax rate is 20% and the company uses the future income tax method to account for income taxes. At the end of last year, True’s future income tax liability was $7,000. Calculate True’s future tax expense/recovery for the current year?
a.
$4800 recovery
b.
$6200 expense
c.
$3000 recovery
d.
$800 recovery
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- You are the new accounting manager at the Barry Transport Company. Your CFO has asked you to provide input on the company's income tax position based on the following: 1. Pretax accounting income was $50 million and taxable income was $6 million for the year ended December 31, 2021. 2. The difference was due to three items: a. Tax depreciation exceeds book depreciation by $40 million in 2021 for the business complex acquired that year. This amount is scheduled to be $60 million in 2022 and to reverse as ($50 million) and ($50 million) in 2023 and 2024, respectively. b. Insurance of $8 million was paid in 2021 for 2022 coverage. c. A $4 million loss contingency was accrued in 2021, to be paid in 2023. 3. No temporary differences existed at the beginning of 2021. 4. The tax rate is 25%. Required: 1. Determine the amounts necessary to record income taxes for 2021, and prepare the appropriate journal entry. 2. Assume the enacted federal income tax law specifies that the tax rate will…IMPORTANT: PLEASE ANSWER CORRECTLY AND I WILL MAKE SURE TO LIKE. THE QUESTION IS IN THE IMAGE ATTACHED. I ONLY NEED PART C. The following information was disclosed during the audit of Whispering Inc. 1. Year Amount Dueper Tax Return 2020 $129,100 2021 108,600 2. On January 1, 2020, equipment costing $579,300 is purchased. For financial reporting purposes, the company uses straight-line depreciation over a 5-year life. For tax purposes, the company uses the elective straight-line method over a 5-year life. (Hint: For tax purposes, the half-year convention as discussed in Appendix 11A must be used.) 3. In January 2021, $214,500 is collected in advance rental of a building for a 3-year period. The entire $214,500 is reported as taxable income in 2021, but $143,000 of the $214,500 is reported as unearned revenue in 2021 for financial reporting purposes. The remaining amount of unearned revenue is to be recognized equally in 2022 and 2023. 4. The…The accountant of Monkey King Company presented to you the following information in line with your 2022 audit of Monkey King Company’s income tax related balances: Pre-tax financial income 3,000,000 Impairment loss on Machinery 50,000 Unearned rental income 350,000 Prepaid advertising expense 250,000 Interest income on time deposit 80,000 Excess tax depreciation over accounting depreciation 420,000 Installment sale which will be recognized as taxable income upon collection 900,000 Bad debts expense using a method under accrual basis 75,000 Provision for warranty 180,000 Unrealized loss on trading securities 20,000 Impairment loss on goodwill 30,000 Capitalized development cost 100,000 Income tax rate is constant 30% Questions: 1. How much is the deferred tax liability at December 31, 2022? 2. How much is the deferred tax asset at December 31, 2022? 3. How much is the total income tax expense for the year…
- The audited financial statements for New Life Manufacturing for year-end December 31, 2022, show an accounting profit after tax of $16,500,000 after charging the following: • Depreciation $2,500,000• Tax for the year $500,000 • Property Tax $1,000,000 • Interest expense $15,000 • Preference dividends of $40,000 • Legal fees $1,110,000 • Insurance of $750,000 • Bad debts $40,000 • Foreign Travel $20,000 • Repairs and Maintenance $1,500,000 • General expenses $600,000Other Information 1. Property Tax of $600,000 was paid for the property on which the company’s factory is located; $300,000 for the office premises and $100,000 for the CEO’s home. 2. The insurance was paid for the factory and office premises. 3. Loss on disposal of fixed assets $350,000 4. Income Tax Refund of $700,000 was included as part of the entity’s income. 5. The bad debt expense includes a general provision of $10,000 and a specific provision of $30,000. 6. The company paid final ordinary dividends…The audited financial statements for New Life Manufacturing for year-end December 31, 2022,show an accounting profit after tax of $16,500,000 after charging the following: • Depreciation $2,500,000• Tax for the year $500,000• Property Tax $1,000,000• Interest expense $15,000• Preference dividends of $40,000• Legal fees $1,110,000• Insurance of $750,000• Bad debts $40,000• Foreign Travel $20,000• Repairs and Maintenance $1,500,000• General expenses $600,000 Other Information1. Property Tax of $600,000 was paid for the property on which the company’s factory islocated; $300,000 for the office premises and $100,000 for the CEO’s home. 2. The insurance was paid for the factory and office premises. 3. Loss on disposal of fixed assets $350,000 4. Income Tax Refund of $700,000 was included as part of the entity’s income. 5. The bad debt expense includes a general provision of $10,000 and a specific provision of$30,000. 6. The company paid final ordinary dividends totaling $100,000. 7. Repairs…The audited financial statements for New Life Manufacturing for year-end December 31, 2022,show an accounting profit after tax of $16,500,000 after charging the following:• Depreciation $2,500,000`• Tax for the year $500,000• Property Tax $1,000,000• Interest expense $15,000• Preference dividends of $40,000 • Legal fees $1,110,000• Insurance of $750,000• Bad debts $40,000• Foreign Travel $20,000• Repairs and Maintenance $1,500,000• General expenses $600,000 1.Property Tax of $600,000 was paid for the property on which the company’s factory is located; $300,000 for the office premises and $100,000 for the CEO’s home. 2. The insurance was paid for the factory and office premises. 3. Loss on disposal of fixed assets $350,0004. Income Tax Refund of $700,000 was included as part of the entity’s income.5. The bad debt expense includes a general provision of $10,000 and a specific provision of $30,000.6. The company paid final ordinary dividends totaling $100,000.7. Repairs and maintenance…
- You are the new accounting manager at the Barry Transport Company. Your CFO has asked you to provide input on the company's income tax position based on the following: Pretax accounting income was $45 million and taxable income was $8 million for the year ended December 31, 2021. The difference was due to three items: Tax depreciation exceeds book depreciation by $30 million in 2021 for the business complex acquired that year. This amount is scheduled to be $60 million in 2022 and to reverse as ($50 million) and ($40 million) in 2023 and 2024, respectively. Insurance of $12 million was paid in 2021 for 2022 coverage. A $5 million loss contingency was accrued in 2021, to be paid in 2023. No temporary differences existed at the beginning of 2021. The tax rate is 25%. Required:1. Determine the amounts necessary to record income taxes for 2021, and prepare the appropriate journal entry.2. Assume the enacted federal income tax law specifies that the tax rate will change from 25%…You were asked by your audit client Panga Inc., to assist them in preparing its income tax return for the period ended December 31, 2021. You investigation revealed the following information: Pre-tax financial income P10,000,000 Estimated litigation loss recognized as a provision for the current year 600,000 Accrued rental income 1,200,000 Prepaid operating expenses 250,000 Unearned rental income 300,000 Dividend income from domestic corporation 500,000 Life insurance expense 300,000 Current income tax is 25% and is expected to remain in 2022 but will increase to 30% in 2023. Assuming all temporary differences will clear by 2022, what is the total tax expense for the year?Accounting Company A is preparing its financial statements as at 31 December 20X3. On 31 December 20X3, Company A acquired an asset for 900, which is expected to be consumed by the end of 20X4. No tax deduction can be obtained for the cost of the asset. The company’s intention is to use the asset and not to sell it. The sale of assets is taxed at 40%. Internal consumption is taxed at 30%. What is the amount of deferred tax liability relating to the acquired asset as at 31 December 20X3?
- The audited financial statements for New Life Manufacturing for year-end December 31, 2022,show an accounting profit after tax of $16,500,000 after charging the following:• Depreciation $2,500,000`• Tax for the year $500,000• Property Tax $1,000,000• Interest expense $15,000• Preference dividends of $40,000• Legal fees $1,110,000• Insurance of $750,000• Bad debts $40,000• Foreign Travel $20,000• Repairs and Maintenance $1,500,000• General expenses $600,000Other Information1. Property Tax of $600,000 was paid for the property on which the company’s factory islocated; $300,000 for the office premises and $100,000 for the CEO’s home.2. The insurance was paid for the factory and office premises.3. Loss on disposal of fixed assets $350,0004. Income Tax Refund of $700,000 was included as part of the entity’s income.5. The bad debt expense includes a general provision of $10,000 and a specific provision of$30,000.6. The company paid final ordinary dividends totaling $100,000.7. Repairs and…Full Tax Co. is incorporated and tax resident in Barbados. The audited financial statements for Full Tax Co. for year-end December 31, 2021, show an accounting profit after tax of $5,500,000 after charging the following: • Depreciation $1,500,000 • Tax $500,000 • Property Tax $900,000 • Interest expense $15,000 • Preference dividends of $40,000 • Legal fees $1,110,000 • Insurance of $750,000 • Bad debts $40,000 • Foreign Travel $20,000 • Repairs and Maintenance $1,500,000 • General expenses $600,000 Other Information 1. Property Tax of $600,000 was paid for the property on which the company’s factory is located; $300,000 for the office premises and $100,000 for the director’s home. 2. The insurance was paid for the factory and office premises. 3. The bad debt expense includes a general provision of $10,000 and a specific provision of $30,000. 4. The company paid interim ordinarily dividends totaling $100,000 5. Repairs and Maintenance include for $500,000 removing the office ceramic…Full Tax Co. is incorporated and tax resident in Barbados. The audited financial statements for Full Tax Co. for year-end December 31, 2022, show an accounting profit after tax of $5,500,000 after charging the following: • Depreciation $1,500,000 •Tax for the year $500,000 • Property Tax $900,000 • Interest expense $15,000 • Preference dividends of $40,000 • Legal fees $1,110,000 • Insurance of $750,000 • Bad debts $40,000 • Foreign Travel $20,000 • Repairs and Maintenance $1,500,000 • General expenses $600,000 Other Information 1. Property Tax of $600,000 was paid for the property on which the company's factory is located; $300,000 for the office premises and $100,000 for the director's home. 2. The insurance was paid for the factory and office premises. 3. The bad debt expense includes a general provision of $10,000 and a specific provision of $30,000. 4. The company paid interim ordinarily dividends totaling $100,000. 5. Repairs and Maintenance include for $500,000 removing the…