W2_case_simulation - $600 Permanent differences Lobbying...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
SITUATION Pretax financial income for 2006 Other Facts For 2006: Tax depreciation   Book depreciation Lobbying expense Direct write-off bad debt tax deduction Allowance method bad debt expense Disallowed Travel and Entertainment Warranty expense higher than warranty tax deduction Legal tax deduction higher than legal expense Municipal bond interest income Income tax rate for 2006 and all other years REQUIRED PUT YOUR EXCEL WORK BELOW Part 1 Pretax financial income Taxable income Part 2  12/31/2006 Part 1:  Using Excel, prepare a schedule in good form computing  taxable income for 2006, showing separately permanent and  temporary differences. Part 2:  Using Excel, make the necessary income tax accrual journal  entry for 2006
Background image of page 1

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

View Full DocumentRight Arrow Icon
600 100 70 10 24 32 80 26 100 15 40% DR CR
Background image of page 2
EXCEL SOLUTIONS Part 1 Pretax financial income
Background image of page 3

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

View Full DocumentRight Arrow Icon
Background image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: $600 Permanent differences Lobbying expense disallowed 10 10 Disallowed T&E expense 80 80 Municipal bond nontaxable interest income (15) 75 Temporary differences Excess of tax over book depreciation (30) Excess of warranty expense over tax deduction 26 Excess of bad debt expense over tax deduction 8 Excess of legal tax deduction over expense (100) (96) Taxable Income $579 Part 2 DR CR 12/31/2006 Income Tax Expense 270.0 Current Income Tax Liability 231.6 Deferred Income Tax Asset-Current 26.4 Deferred Income Tax Liability-Long term 12.0 40% Deferred Tax Liability-long term (12.0) Deferred Tax Asset -current 10.4 Deferred Tax Asset -current 3.2 Deferred Tax Asset -current (40.0) (26.4)...
View Full Document

This note was uploaded on 02/23/2011 for the course ACC 557 taught by Professor Callan during the Spring '11 term at Keller Graduate School of Management.

Page1 / 4

W2_case_simulation - $600 Permanent differences Lobbying...

This preview shows document pages 1 - 4. Sign up to view the full document.

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