ACC304Week_7Chapter_14HW

ACC304Week_7Chapter_14HW - WEEK 7 Chapter 14 INCOME TAXES...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
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.
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
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 Taxable income for 2004 $120,000 Enacted tax rate 30% Income tax payable for 2004 $ 36,000 (b) Future Years 2005 2006 2007 Total Future taxable (deductible) amounts Tax rate Deferred tax liability (asset) $55,000 30% $16,500 $60,000 30% $18,000 $65,000 30% $19,500 $180,000 $ 54,000 Deferred tax liability at the end of 2004 $54,000 Deferred tax liability at the beginning of 2004 0
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern