In 2013 company as income before taxes for the year

This preview shows page 13 - 15 out of 21 pages.

In 2013, Company A's Income Before Taxes for the year is $110,000 but the Taxable Income according to the tax return was only $100,000 due to the fact that the tax deduction for depreciation was greater than the depreciation expense. The tax rate is 30%. An adjusting entry to record taxes was recorded at December 31, 2013. It is mid-April and Company A pays their taxes for the prior year. What is the entry required to record the payment ?
made for the year up to this point. Taxes are not required to be paid until April 15, 2014. What is the entry required as of December 31, 2013 to record taxes?
An adjusting entry to record taxes was recorded at December 31, 2013. It is mid-April and Company B pays their taxes for the prior year. What is the entry required to record the payment ?
Bikram Yoga Natick pays taxes on a cash basis so annual membership fees received during the year are included in determining their Taxable Income. However, for financial reporting purposes, they are only treated as revenue as time passes and the memberships are expiring. This creates a temporary timing difference which causes Taxable Income to be greater than Income Before Taxes in years when the Deferred Revenue increases; 2013 was such a year.

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture