Problems for Chapter 19(1) - E19-1(One Temporary Difference Future Taxable Amounts One Rate No Beginning Deferred Taxes South Carolina Corporation has

Problems for Chapter 19(1) - E19-1(One Temporary Difference...

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E19-1. (One Temporary Difference, Future Taxable Amounts, One Rate, No Beginning Deferred Taxes)South Carolina Corporation has one temporary difference at the end of 2014 that will reverse and cause taxable amounts of $55,000 in 2015, $60,000 in 2016, and $65,000 in 2017. South Carolina's pretax financial income for 2014 is $300,000, and the tax rate is 30% for all years. There are no deferred taxes at the beginning of 2014.Instructions(a) Compute taxable income and income taxes payable for 2014.(b) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2014.(c) Prepare the income tax expense section of the income statement for 2014, beginning with the line “Income before income taxes.”E19-2. (Two Differences, No Beginning Deferred Taxes, Tracked through 2 Years)The following information is available for Wenger Corporation for 2013 (its first year of operations). 1. Excess of tax depreciation over book depreciation, $40,000. This $40,000 difference will reverse equally over the years 2014-2017.2. Deferral, for book purposes, of $20,000 of rent received in advance. The rent will be recognized in 2014.3. Pretax financial income, $300,000.4. Tax rate for all years, 40%.Instructions(a) Compute taxable income for 2013.(b) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2013.(c) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2014, assuming taxable income of $325,000.
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E19-4. (Three Differences, Compute Taxable Income, Entry for Taxes)Zurich Company reports pretax financial income of $70,000 for 2014. The following items cause taxable income to be different than pretax financial income. 1. Depreciation on the tax return is greater than depreciation on the income statement by $16,000.2. Rent collected on the tax return is greater than rent recognized on the income statement by $22,000.3. Fines for pollution appear as an expense of $11,000 on the income statement.Zurich's tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2014.Instructions(a) Compute taxable income and income taxes payable for 2014.(b)
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