18-Solutions to P18-12 - PROBLEM 18-12(a 2010 Income Tax...

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PROBLEM 18-12 (a) 2010 Income Tax Refund Receivable—2007 . ............ 7,500 ($25,000 X 30%) Income Tax Refund Receivable—2008 . ............ 18,000 ($60,000 X 30%) Income Tax Refund Receivable—2009 . ............ 32,000 ($80,000 X 40%) Current Income Tax Benefit (Due to Loss Carryback) . ................... 57,500 Note: An acceptable alternative is to record only one Income Tax Refund Receivable account for the amount of $57,500. Future Income Tax Asset . .......................... 18,000 Future Income Tax Benefit (Due to Loss Carryforward). .......... 18,000 ($210,000 – $25,000 – $60,000 – $80,000 = $45,000) ($45,000 X 40% = $18,000) 2011 Current Income Tax Expense . ................... 10,000 Income Tax Payable . .......................... 10,000 [($70,000 – $45,000) X 40%] Future Income Tax Expense . ..................... 18,000 Future Income Tax Asset . .................. 18,000 ($18,000 – $0) 2012 Current Income Tax Expense . ................... 31,500 Income Tax Payable ($90,000 X 35%) 31,500
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PROBLEM 18-12 (Continued) (a) One or more income tax refund receivable accounts totalling $57,500 will be reported under current assets on the balance sheet at December 31, 2010. This type of receivable is usually listed immediately above inventory in the current asset section. This receivable is normally collectible within two months of
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18-Solutions to P18-12 - PROBLEM 18-12(a 2010 Income Tax...

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