chapter 19 problems

chapter 19 problems - Chapter 19 Examples Accounting for...

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1 Chapter 19 Examples Accounting for Income Taxes #1 Roost Inc. generated pretax financial income of $5,200,000 for the year ended 12/31/10. Roost’s income tax rate is 35% and historically there have been no differences between book & tax for the accounting of Roost’s revenues and expenses. For 2010, the only difference between taxable income and pretax income relates to $120,000 of premiums paid & expensed by Roost for new life insurance policies on key officers (with Roost named as beneficiary). As you know, such premiums are not deductible for tax purposes. Prepare the necessary journal entry to record income tax expense and to adjust the related balance sheet accounts as of 12/31/10. Describe how income tax expense will be reported on the income statement. Accounting for Income Taxes #2 WFO Inc. generated pretax financial income of $6,400,000 for the year ended 12/31/10. WFO’s income tax rate is 35% and historically there have been no differences between book & tax for the accounting of WFO’s revenues and expenses. For 2010 however, two new differences between taxable income and pretax income have arisen:
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This note was uploaded on 12/14/2011 for the course AC 100 taught by Professor Strickland during the Spring '11 term at Alabama.

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chapter 19 problems - Chapter 19 Examples Accounting for...

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