CH 19 Solutions - EXERCISE 19-3 (a) Taxable income for...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
EXERCISE 19-3 (a) Taxable income for 2010. ........................................ $400,000 Enacted tax rate. ...................................................... 40% Income tax payable for 2010. .................................. $160,000 (b) Future Years 2011 2012 Total Future taxable (deductible) amounts $175,000 $175,000 $350,000 Tax Rate 40% 40% Deferred tax liability (asset) $ 70,000 $ 70,000 $140,000 Deferred tax liability at the end of 2010. .............. $140,000 Deferred tax liability at the beginning of 2010. .... 90,000 Deferred tax expense for 2010 (increase required in deferred tax liability). ...................... 50,000 Current tax expense for 2010. ................................ 160,000 Income tax expense for 2010. ................................ $210,000 Income Tax Expense. .............................................. 210,000 Income Tax Payable. .................................... 160,000 Deferred Tax Liability. .................................. 50,000 (c) Income before income taxes. ................................ $525,000 Income tax expense Current. ......................................................... $160,000 Deferred. ....................................................... 50,000 210,000 Net income. .............................................................. $315,000 EXERCISE 19-8 (a) 2010 Income Tax Expense. ........................................ 336,000 Deferred Tax Asset ($20,000 X 40%). .............. 8,000 Deferred Tax Liability ($30,000 X 40%). ..... 12,000 Income Tax Payable ($830,000 X 40%). ..... 332,000
Background image of page 1

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

View Full DocumentRight Arrow Icon
Income Tax Expense. ....................................... 364,000 Deferred Tax Asset ($10,000 X 40%). .............. 4,000 Deferred Tax Liability ($40,000 X 40%). ..... 16,000 Income Tax Payable ($880,000 X 40%). ..... 352,000 2012 Income Tax Expense. ....................................... 378,000 Deferred Tax Asset ($8,000 X 40%). ............... 3,200 Deferred Tax Liability ($20,000 X 40%). ..... 8,000 Income Tax Payable ($933,000 X 40%). ..... 373,200 (b) Current assets Deferred tax asset ($8,000 + $4,000 + $3,200). ................ $15,200 Long-term liabilities Deferred tax liability ($12,000 + $16,000 + $8,000). ........ $36,000 The warranty is classified as current because the related liability is current. The deferred tax liability is noncurrent because the related asset is noncurrent. (c) Pretax financial income. ........................................ $945,000 Income tax expense Current. ............................................................... $373,200 Deferred ($8,000 – $3,200). ............................... 4,800 378,000 Net Income. ............................................................. $567,000
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 9

CH 19 Solutions - EXERCISE 19-3 (a) Taxable income for...

This preview shows document pages 1 - 3. Sign up to view the full document.

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