ACC304Week_7Chapter_14HW

ACC304Week_7Chapter_14HW - WEEK 7 Chapter 14 INCOME TAXES...

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WEEK 7 Chapter 14 INCOME TAXES BRIEF EXERCISE 14-2 Excess depreciation on tax return $30,000 Tax rate 30% Deferred tax liability $9,000 BRIEF EXERCISE 14-3 Income tax expense. .................................................... $67,500 ................................................................................... *** Deferred tax liability. ................................................................ 9,000. ....................................................................................... ** Income tax payable. ................................................................. 58,500. ...................................................................................... * * $195,000 x 30% = $58,500 ** $30,000 x 30% = $9,000 *** $58,500 + $9,000 = $67,500 The $9,000 deferred tax liability should be classified as a noncurrent liability. The balances in the deferred tax accounts should be classified in the same manner as the related asset. Since property, plant, and equipment is a noncurrent asset, noncurrent liability is the proper classification for the deferred tax liability.
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EXERCISE 14-1 (15-20 minutes) (a) Pretax financial income for 2004 $300,000 Temporary difference resulting in future taxable amounts in 2005 (55,000 ) in 2006 (60,000 ) in 2007 (65,000 ) Taxable income for 2004 $120,000
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This note was uploaded on 02/11/2010 for the course ACC304 acc304 taught by Professor Unknown during the Winter '09 term at Strayer.

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ACC304Week_7Chapter_14HW - WEEK 7 Chapter 14 INCOME TAXES...

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