Chapter 19 Lecture Notes

Chapter 19 Lecture Notes - Accounting for Income Taxes...

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Chapter 19-1 Fundamentals of Fundamentals of Accounting for Accounting for Income Taxes Income Taxes Future taxable Future taxable amounts and amounts and deferred taxes deferred taxes Future deductible Future deductible amounts and amounts and deferred taxes deferred taxes Income Income statement statement presentation presentation Specific Specific differences differences Rate Rate considerations considerations Accounting for Net Accounting for Net Operating Losses Operating Losses Financial Statement Financial Statement Presentation Presentation Review of Asset- Review of Asset- Liability Method Liability Method Loss carryback Loss carryback Loss Loss carryforward carryforward Loss carryback Loss carryback example example Loss Loss carryforward carryforward example example Balance sheet Balance sheet Income Income statement statement Accounting for Income Taxes Accounting for Income Taxes
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Chapter 19-2 1. 1. Identify differences between pretax financial income and taxable income. Identify differences between pretax financial income and taxable income. 2. 2. Describe a temporary difference that results in future taxable amounts. Describe a temporary difference that results in future taxable amounts. 3. 3. Describe a temporary difference that results in future deductible amounts. Describe a temporary difference that results in future deductible amounts. 4. 4. Explain the purpose of a deferred tax asset valuation allowance. Explain the purpose of a deferred tax asset valuation allowance. 5. 5. Describe the presentation of income tax expense in the income statement. Describe the presentation of income tax expense in the income statement. 6. 6. Describe various temporary and permanent differences. Describe various temporary and permanent differences. 7. 7. Explain the effect of various tax rates and tax rate changes on deferred income taxes. Explain the effect of various tax rates and tax rate changes on deferred income taxes. 8. 8. Apply accounting procedures for a loss carryback and a loss carryforward. 9. 9. Describe the presentation of deferred income taxes in financial statements. Describe the presentation of deferred income taxes in financial statements. 10. 10. Indicate the basic principles of the asset-liability method. Indicate the basic principles of the asset-liability method. Learning Objectives Learning Objectives
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Corporations must file income tax returns following the guidelines developed by the Internal Revenue Service (IRS), thus they: Fundamentals of Accounting for Income Taxes calculate taxes payable based upon IRS code, calculate income tax expense based upon GAAP. Amount reported as
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This note was uploaded on 09/16/2011 for the course ACCOUNTING 325 taught by Professor Stubbs during the Spring '11 term at Rutgers.

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Chapter 19 Lecture Notes - Accounting for Income Taxes...

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