Clipp inc earns book net income before tax of 600000

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Chapter 8 / Exercise E8-1
Survey of Accounting
Warren
Expert Verified
39. Clipp, Inc., earns book net income before tax of $600,000. Clipp puts into service a depreciable asset this year, and first year tax depreciation exceeds book depreciation by $120,000. Clipp has recorded no other temporary or permanent book-tax differences. Assuming that the U.S. tax rate is 35%, what is Clipp’s deferred income tax liability reported on its GAAP financial statements? A. $252,000.B. $210,000.C. $168,000.D.$42,000.
40. Jogg, Inc., earns book net income before tax of $600,000. Jogg puts into service a depreciable asset this year, and first year tax depreciation exceeds book depreciation by $120,000. Jogg has recorded no other temporary or permanent book-tax differences. Assuming that the U.S. tax rate is 35%, and that this is Jogg’s first year of operations, what is Jogg’s balance in its deferred tax asset and deferred tax liability accounts at yearend?
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Chapter 8 / Exercise E8-1
Survey of Accounting
Warren
Expert Verified
41. Qute, Inc., earns book net income before tax of $500,000. In computing its book income, Qute deducts $50,000 more in warranty expense for book purposes than is allowed for tax purposes. Qute records no other temporary or permanent book-tax differences. Assuming that the U.S. tax rate is 35% and no valuation allowance is required, what is Qute’s total income tax expense reported on its GAAP financial statements?
42. Morrisson, Inc., earns book net income before tax of $500,000. In computing its book income, Morrisson deducts $50,000 more in warranty expense for book purposes than is allowed for tax purposes. Morrisson records no other temporary or permanent book-tax differences. Assuming that the U.S. tax rate is 35% and no valuation allowance is required, what is Morrisson’s current income tax expense reported on its GAAP financialstatements?
43. Never, Inc., earns book net income before tax of $500,000. In computing its book income, Never deducts $50,000 more in warranty expense for book purposes than is allowed for tax purposes. Never records no other temporary or permanent book-tax differences. Assuming that the U.S. tax rate is 35% and no valuation allowance is required, what is Never’s deferred income tax asset reported on its GAAP financial statements? A. $192,500.B. $175,000.C. $157,500.D.$17,500.
44. South, Inc., earns book net income before tax of $400,000 in 2013. South acquires a depreciable asset in 2013, and first year tax depreciation exceeds book depreciation by $50,000. At the end of 2013, South’s deferred tax liability account balance is $17,500. In 2014, South earns $500,000 book net income before tax, and its book depreciation exceeds tax depreciation by $20,000. South records no other temporary or permanent book-tax differences. Assuming that the U.S. tax rate is 35%, what is South’s total income tax expense reported on its GAAP financial statements for 2014?

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