Ch16HWSoln - Accounting 124 Chapter 16 Homework Solutions...

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Accounting 124 Chapter 16 Homework Solutions Exercise 16-7 1. d 2. d 3. a 4. c
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Exercise 16-11 Requirement 1 ($ in thousands) Current Future Future Year Taxable Taxable 2006 Amounts Amounts 2007 2008 2009 Accounting income 300 Non-temporary difference: Municipal bond interest (40) Temporary difference: Depreciation (10 ) (2) 2 10 10 Taxable income 250 Enacted tax rate 40 % 40 % Tax payable currently 100 Deferred tax liability 4 Deferred tax liability: Ending balance (balance currently needed) $ 4 Less: beginning balance 0 Change needed to achieve desired balance $ 4 Journal entry at the end of 2006 Income tax expense (to balance) 104 Deferred tax liability (determined above) 4 Income tax payable (determined above) 100 Requirement 2 ($ in thousands) Pretax accounting income $300 Income tax expense (104 ) Net income $196
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Exercise 16-23 Requirement 1 ($ in thousands) Current Future Prior Years Year Deductible 2004 2005 2006 Amounts [total] Operating loss (160) Loss carryback (80) (60) 140 Loss carryforward 20 (20) 0 Enacted tax rate 40 % 45 % 40 % 40 % Tax payable (refundable) (32 ) (27 ) 0 Deferred tax asset (8) Deferred tax asset: Ending balance (balance currently needed) $ 8 Less: beginning balance (0 ) Change needed to achieve desired balance $8 Journal entry at the end of 2006 Receivable – income tax refund ($32 + 27) 59 Deferred tax asset (determined above) 8 Income tax benefit – operating loss (to balance) 67 Requirement 2 ($ in thousands) Operating loss before income taxes $160 Less: Income tax benefit: Tax refund from loss carryback $59 Future tax savings from loss carryforward 8 (67 ) Net operating loss $ 93
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This homework help was uploaded on 04/10/2008 for the course ACT 124 taught by Professor Venuti during the Fall '07 term at Hofstra University.

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Ch16HWSoln - Accounting 124 Chapter 16 Homework Solutions...

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