Kieso 13th ed sol ch 19

Kieso 13th ed sol ch 19 - EXERCISE 19-1 (1520 minutes) (a)...

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Unformatted text preview: EXERCISE 19-1 (1520 minutes) (a) Pretax financial income for 2010............................................ $400,000 Temporary difference resulting in future taxable amounts in 2011................................................................... (55,000) in 2012................................................................... (60,000) in 2013................................................................... (75,000 ) Taxable income for 2010......................................................... $210,000 Taxable income for 2010......................................................... $210,000 Enacted tax rate....................................................................... ............................................................................................ 30% Income tax payable for 2010................................................... $ 63,000 (b) Future Years 2011 2012 2013 Total Future taxable (deductible) amounts $55,000 $60,000 $75,000 $190,000 Tax rate 30% 30% 30% Deferred tax liability (asset) $16,500 $18,000 $22,500 $ 57,000 Deferred tax liability at the end of 2010................... $ 57,000 Deferred tax liability at the beginning of 2010........ Deferred tax expense for 2010 (increase in deferred tax liability).............................................. 57,000 Current tax expense for 2010 (Income tax payable).............................................. 63,000 Income tax expense for 2010.................................... $120,000 Income Tax Expense................................................. 120,000 Income Tax Payable........................................... 63,000 Deferred Tax Liability........................................ 57,000 (c) Income before income taxes.................................... $400,000 Income tax expense Current................................................................ $63,000 Deferred.............................................................. 57,000 120,000 Net income.................................................................. $280,000 Note : The current/deferred tax expense detail can be presented in the notes to the financial statements. EXERCISE 19-2 (1520 minutes) (a) Pretax financial income for 2010............................ $350,000 Excess of tax depreciation over book depreciation................................................. (40,000) Rent received in advance........................................ 25,000 Taxable income................................................. $335,000 (b) Income Tax Expense................................................ 140,000 Deferred Tax Asset................................................... 10,000* Income Tax Payable ($335,000 X .40)................
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Kieso 13th ed sol ch 19 - EXERCISE 19-1 (1520 minutes) (a)...

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