Chapter+18+Vol.+9+Part+1+Solutions

Chapter+18+Vol.+9+Part+1+Solutions - EXERCISE 18-3 (15-20...

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Unformatted text preview: EXERCISE 18-3 (15-20 minutes) (a) Accounting income $105,000 Permanent differences: Non-deductible fines 15,000 120,000 Reversing differences: Excess of CCA over depreciation (16,000) Excess rent collected over rent earned 24,000 Taxable income $128,000 Current income taxes 30% $38,400 (b) Deductible Balance (Taxable) Future Tax Current Sheet Temporary Tax Asset Long- Account Differences X Rate (Liability) Term PP & E ($16,000)* 30% ($4,800) LT Unearned Rent revenue 24,000 30% 7,200 C Future income tax asset, Dec. 31, 2011 2,400 Future income tax asset before adjustment Incr. in future income tax asset and future income tax benefit for 2011 $2,400 * Carrying amount and tax basis are not given in the exercise, only the net difference is provided. (c) Current Income Tax Expense......................... 38,400 Income Tax Payable................................. 38,400 Future Income Tax Asset................................ 7,200* Future Income Tax Benefit...................... 2,400 Future Income Tax Liability..................... 4,800* * or a net debit to Future Income Tax Asset of $2,400 Because of a flat tax rate, these totals can be reconciled: ($24,000 $16,000) X 30% = $7,200 + ($4,800). EXERCISE 18-3 (Continued)...
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This note was uploaded on 08/02/2011 for the course ACCT 352 taught by Professor Freeman during the Summer '11 term at Windsor.

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Chapter+18+Vol.+9+Part+1+Solutions - EXERCISE 18-3 (15-20...

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