Solutions for Chapter 19 exercises and problems [13th edition]

Intermediate Accounting

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Unformatted text preview: EXERCISE 19-1 (a) Pretax financial income for 2010........................................................................... $400,000 Temporary difference resulting in future taxable amounts in 2011.......................................................................................... (55,000) in 2012.......................................................................................... (60,000) in 2013.......................................................................................... (75,000 ) Taxable income for 2010....................................................................................... $210,000 Taxable income for 2010....................................................................................... $210,000 Enacted tax rate...................................................................................................... 30% Income tax payable for 2010.................................................................................. $ 63,000 (b) Future Years 2011 2012 2013 Total Future taxable (deductible) amounts $55,000 $60,000 $75,000 $190,000 Tax rate 30% 30% 30% Deferred tax liability (asset) $16,500 $18,000 $22,500 $ 57,000 Deferred tax liability at the end of 2010.............................................. $ 57,000 Deferred tax liability at the beginning of 2010.................................... Deferred tax expense for 2010 (increase in deferred tax liability)........................................................................ 57,000 Current tax expense for 2010 (Income tax payable)......................................................................... 63,000 Income tax expense for 2010............................................................... $120,000 Income Tax Expense............................................................................ 120,000 Income Tax Payable................................................................... 63,000 Deferred Tax Liability............................................................... 57,000 (c) Income before income taxes................................................................ $400,000 Income tax expense Current....................................................................................... $63,000 Deferred..................................................................................... 57,000 120,000 Net income........................................................................................... $280,000 Note : The current/deferred tax expense detail can be presented in the notes to the financial statements. EXERCISE 19-2 (a) Pretax financial income for 2010....................................................... $350,000 Excess of tax depreciation over book depreciation............................................................................ (40,000) Rent received in advance................................................................... 25,000 Taxable income........................................................................Taxable income....
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Solutions for Chapter 19 exercises and problems [13th edition]

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