ch19tcshort

ch19tcshort - CHAPTER 19 19 ACCOUNTING FOR INCOME TAXES

Info iconThis preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 19-1 C H A P T E R C H A P T E R 19 19 ACCOUNTING FOR INCOME TAXES ACCOUNTING FOR INCOME TAXES Intermediate Accounting 13th Edition Kieso, Weygandt, and Warfield
Background image of page 1

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

View Full DocumentRight Arrow Icon
Chapter 19-2 1. Identify differences between pretax financial income and taxable income. 2. Describe a temporary difference that results in future taxable amounts. 3. Describe a temporary difference that results in future deductible amounts. 4. Explain the purpose of a deferred tax asset valuation allowance. 5. Describe the presentation of income tax expense in the income statement. 6. Describe various temporary and permanent differences. 7. Explain the effect of various tax rates and tax rate changes on deferred income taxes. 8. Apply accounting procedures for a loss carryback and a loss carryforward. 9. Describe the presentation of deferred income taxes in financial statements. 10. Indicate the basic principles of the asset-liability method. Learning Objectives Learning Objectives
Background image of page 2
Chapter 19-3 Corporations must file income tax returns following the guidelines developed by the Internal Revenue Service (IRS), thus they: LO 1 Identify differences between pretax financial income and taxable income. Fundamentals of Accounting for Income Taxes Fundamentals of Accounting for Income Taxes calculate taxes payable based upon IRS code, calculate income tax expense based upon GAAP. Amount reported as tax expense will often differ from the amount of taxes payable to the IRS.
Background image of page 3

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

View Full DocumentRight Arrow Icon
Chapter 19-4 Tax Code Exchanges Investors and Creditors Financial Statements Pretax Financial Income GAAP Income Tax Expense Taxable Income Income Tax Payable Tax Return vs . Fundamentals of Accounting for Income Taxes Fundamentals of Accounting for Income Taxes LO 1 Identify differences between pretax financial income and taxable income. Illustration 19-1
Background image of page 4
Chapter 19-5 Illustration: KRC, Inc. reported revenues of $130,000 and expenses of $60,000 in each of its first three years of operations. For tax purposes, KRC reported the same expenses to the IRS in each of the years. KRC reported taxable revenues of $100,000 in 2010, $150,000 in 2011, and $140,000 in 2012. What is the effect on the accounts of reporting different amounts of revenue for GAAP versus tax? LO 1 Identify differences between pretax financial income and taxable income. Fundamentals of Accounting for Income Taxes Fundamentals of Accounting for Income Taxes
Background image of page 5

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

View Full DocumentRight Arrow Icon
19-6 Revenues Expenses Pretax financial income Income tax expense (40%) $130,000 60,000 $70,000 $28,000 $130,000 2011 60,000 $70,000 $28,000 $130,000 2012 60,000 $70,000 $28,000 $390,000 Total 180,000 $210,000 $84,000 GAAP Reporting GAAP Reporting Revenues Expenses Pretax financial income Income tax payable (40%) $100,000 2010 60,000 $40,000 $16,000 $150,000 2011 60,000 $90,000 $36,000 $140,000 2012 60,000 $80,000 $32,000 $390,000 Total 180,000 $210,000 $84,000 Tax Reporting 2010 LO 1 Identify differences between pretax financial income and taxable income. Book vs. Tax Difference
Background image of page 6
Image of page 7
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 54

ch19tcshort - CHAPTER 19 19 ACCOUNTING FOR INCOME TAXES

This preview shows document pages 1 - 7. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online