CHAPTER 14—TAXES ON THE FINANCIAL STATEMENTS

CHAPTER 14—TAXES ON THE FINANCIAL STATEMENTS

Question # 00052430 Posted By: solutionshere Updated on: 03/06/2015 07:08 AM Due on: 03/06/2015
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1609. CHAPTER 14—TAXES ON THE FINANCIAL STATEMENTS Question PR #11
Gator, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Assume a 34% corporate tax rate and no valuation allowance.


Tax Debit/(Credit)

Book Debit/(Credit)

Assets

Cash

$ 300

$ 300

Accounts Receivable

5,000

5,000

Buildings

300,000

300,000

Acc. Depreciation

(150,000)

(80,000)

Furniture & Fixtures

40,000

40,000

Acc. Depreciation

(21,000)

(15,000)

Total Assets

$174,300

$250,300



Liabilities

Accrued Litigation Expense

$ –0–

($ 27,000)

Note Payable

(116,000)

(116,000)

Total Liabilities

($116,000)

($143,000)



Stockholder Equity

Paid in Capital

($ 1,000)

($ 1,000)

Retained Earnings

(57,300)

(106,300)

Total Liabilities and
Stockholders Equity


($174,300)



($250,300)


Gator Inc.’s gross deferred tax assets and liabilities at the beginning of Gator’s year are listed below.

Beginning of Year

Accrued Litigation Expense

$21,000

Subtotal

$21,000

Applicable Tax Rate

´ 34%

Gross Deferred Tax Asset

$ 7,140



Building – Acc. Depreciation

($61,000)

Furniture & fixtures – Acc. Depreciation

(3,200)

Subtotal

($64,200)

Applicable tax rate

´ 34%

Gross deferred tax liability

($21,828)


Gator Inc.’s book income before tax is $6,300. Gator records two permanent book-tax differences. It earned $250 in tax exempt municipal bond interest and $460 in nondeductible meals and entertainment expense. Provide the journal entry to record Gator’s current tax expense.

1610. CHAPTER 14—TAXES ON THE FINANCIAL STATEMENTS Question PR #12
Gator, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Assume a 34% corporate tax rate and no valuation allowance.


Tax Debit/(Credit)

Book Debit/(Credit)

Assets

Cash

$ 300

$ 300

Accounts Receivable

5,000

5,000

Buildings

300,000

300,000

Acc. Depreciation

(150,000)

(80,000)

Furniture & Fixtures

40,000

40,000

Acc. Depreciation

(21,000)

(15,000)

Total Assets

$174,300

$250,300



Liabilities

Accrued Litigation Expense

$ –0–

($ 27,000)

Note Payable

(116,000)

(116,000)

Total Liabilities

($116,000)

($143,000)



Stockholder Equity

Paid in Capital

($ 1,000)

($ 1,000)

Retained Earnings

(57,300)

(106,300)

Total Liabilities and
Stockholders Equity


($174,300)



($250,300)


Gator Inc.’s gross deferred tax assets and liabilities at the beginning of Gator’s year are listed below.

Beginning of Year

Accrued Litigation Expense

$21,000

Subtotal

$21,000

Applicable Tax Rate

´ 34%

Gross Deferred Tax Asset

$ 7,140



Building – Acc. Depreciation

($61,000)

Furniture & fixtures – Acc. Depreciation

(3,200)

Subtotal

($64,200)

Applicable tax rate

´ 34%

Gross deferred tax liability

($21,828)


Gator Inc.’s book income before tax is $6,300. Gator records two permanent book-tax differences. It earned $250 in tax exempt municipal bond interest and $460 in nondeductible meals and entertainment expense. What is Gator’s total provision for income tax expense reported on its GAAP financial statement and its book net income after tax?



1611. CHAPTER 14—TAXES ON THE FINANCIAL STATEMENTS Question PR #13
Gator, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Assume a 34% corporate tax rate and no valuation allowance.


Tax Debit/(Credit)

Book Debit/(Credit)

Assets

Cash

$ 300

$ 300

Accounts Receivable

5,000

5,000

Buildings

300,000

300,000

Acc. Depreciation

(150,000)

(80,000)

Furniture & Fixtures

40,000

40,000

Acc. Depreciation

(21,000)

(15,000)

Total Assets

$174,300

$250,300



Liabilities

Accrued Litigation Expense

$ –0–

($ 27,000)

Note Payable

(116,000)

(116,000)

Total Liabilities

($116,000)

($143,000)



Stockholder Equity

Paid in Capital

($ 1,000)

($ 1,000)

Retained Earnings

(57,300)

(106,300)

Total Liabilities and
Stockholders Equity


($174,300)



($250,300)


Gator Inc.’s gross deferred tax assets and liabilities at the beginning of Gator’s year are listed below.

Beginning of Year

Accrued Litigation Expense

$21,000

Subtotal

$21,000

Applicable Tax Rate

´ 34%

Gross Deferred Tax Asset

$ 7,140



Building – Acc. Depreciation

($61,000)

Furniture & fixtures – Acc. Depreciation

(3,200)

Subtotal

($64,200)

Applicable tax rate

´ 34%

Gross deferred tax liability

($21,828)


Gator Inc.’s book income before tax is $6,300. Gator records two permanent book-tax differences. It earned $250 in tax exempt municipal bond interest and $460 in nondeductible meals and entertainment expense. Provide the income tax footnote rate reconciliation for Gator.



1612. CHAPTER 14—TAXES ON THE FINANCIAL STATEMENTS Question PR #14
Amelia, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Assume a 34% corporate tax rate and no valuation allowance.


Tax Debit/(Credit)

Book Debit/(Credit)

Assets

Cash

$ 1,200

$ 1,200

Accounts Receivable

20,000

20,000

Buildings

1,200,000

1,200,000

Acc. Depreciation

(600,000)

(320,000)

Furniture & Fixtures

160,000

160,000

Acc. Depreciation

(84,000)

(60,000)

Total Assets

$ 697,200

$1,001,200



Liabilities

Accrued Vacation Pay

$ –0–

($108,000)

Note Payable

(464,000)

(464,000)

Total Liabilities

($464,000)

($572,000)



Stockholder Equity

Paid in Capital

($ 4,000)

($ 4,000)

Retained Earnings

(229,200)

(425,200)

Total Liabilities and
Stockholders Equity


($697,200)


($1,001,200)


Amelia Inc.’s gross deferred tax assets and liabilities at the beginning of Amelia’s year are listed below.

Beginning of Year

Accrued Vacation Pay

$84,000

Subtotal

$84,000

Applicable Tax Rate

´ 34%

Gross Deferred Tax Asset

$28,560



Building – Acc. Depreciation

($244,000)

Furniture & fixtures – Acc. Depreciation

(12,800)

Subtotal

($256,800)

Applicable tax rate

´ 34%

Gross deferred tax liability

($ 87,312)


Amelia Inc.’s book income before tax is $25,200. Amelia records two permanent book-tax differences. It earned $1,000 in tax exempt municipal bond interest and $1,840 in nondeductible meals and entertainment expense. Determine the change in Amelia’s deferred tax assets for the current year.



1613. CHAPTER 14—TAXES ON THE FINANCIAL STATEMENTS Question PR #15
Amelia, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Assume a 34% corporate tax rate and no valuation allowance.


Tax Debit/(Credit)

Book Debit/(Credit)

Assets

Cash

$ 1,200

$ 1,200

Accounts Receivable

20,000

20,000

Buildings

1,200,000

1,200,000

Acc. Depreciation

(600,000)

(320,000)

Furniture & Fixtures

160,000

160,000

Acc. Depreciation

(84,000)

(60,000)

Total Assets

$ 697,200

$1,001,200



Liabilities

Accrued Vacation Pay

$ –0–

($108,000)

Note Payable

(464,000)

(464,000)

Total Liabilities

($464,000)

($572,000)



Stockholder Equity

Paid in Capital

($ 4,000)

($ 4,000)

Retained Earnings

(229,200)

(425,200)

Total Liabilities and
Stockholders Equity


($697,200)


($1,001,200)


Amelia Inc.’s gross deferred tax assets and liabilities at the beginning of Amelia’s year are listed below.

Beginning of Year

Accrued Vacation Pay

$84,000

Subtotal

$84,000

Applicable Tax Rate

´ 34%

Gross Deferred Tax Asset

$28,560



Building – Acc. Depreciation

($244,000)

Furniture & fixtures – Acc. Depreciation

(12,800)

Subtotal

($256,800)

Applicable tax rate

´ 34%

Gross deferred tax liability

($ 87,312)


Amelia Inc.’s book income before tax is $25,200. Amelia records two permanent book-tax differences. It earned $1,000 in tax exempt municipal bond interest and $1,840 in nondeductible meals and entertainment expense. Determine the net deferred tax asset or net deferred tax liability at year end.



1614. CHAPTER 14—TAXES ON THE FINANCIAL STATEMENTS Question PR #16
Amelia, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Assume a 34% corporate tax rate and no valuation allowance.


Tax Debit/(Credit)

Book Debit/(Credit)

Assets

Cash

$ 1,200

$ 1,200

Accounts Receivable

20,000

20,000

Buildings

1,200,000

1,200,000

Acc. Depreciation

(600,000)

(320,000)

Furniture & Fixtures

160,000

160,000

Acc. Depreciation

(84,000)

(60,000)

Total Assets

$ 697,200

$1,001,200



Liabilities

Accrued Vacation Pay

$ –0–

($108,000)

Note Payable

(464,000)

(464,000)

Total Liabilities

($464,000)

($572,000)



Stockholder Equity

Paid in Capital

($ 4,000)

($ 4,000)

Retained Earnings

(229,200)

(425,200)

Total Liabilities and
Stockholders Equity


($697,200)


($1,001,200)


Amelia Inc.’s gross deferred tax assets and liabilities at the beginning of Amelia’s year are listed below.

Beginning of Year

Accrued Vacation Pay

$84,000

Subtotal

$84,000

Applicable Tax Rate

´ 34%

Gross Deferred Tax Asset

$28,560



Building – Acc. Depreciation

($244,000)

Furniture & fixtures – Acc. Depreciation

(12,800)

Subtotal

($256,800)

Applicable tax rate

´ 34%

Gross deferred tax liability

($ 87,312)


Amelia Inc.’s book income before tax is $25,200. Amelia records two permanent book-tax differences. It earned $1,000 in tax exempt municipal bond interest and $1,840 in nondeductible meals and entertainment expense. Determine the change in Amelia’s deferred tax liabilities for the current year.

1615. CHAPTER 14—TAXES ON THE FINANCIAL STATEMENTS Question PR #17
Amelia, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Assume a 34% corporate tax rate and no valuation allowance.


Tax Debit/(Credit)

Book Debit/(Credit)

Assets

Cash

$ 1,200

$ 1,200

Accounts Receivable

20,000

20,000

Buildings

1,200,000

1,200,000

Acc. Depreciation

(600,000)

(320,000)

Furniture & Fixtures

160,000

160,000

Acc. Depreciation

(84,000)

(60,000)

Total Assets

$ 697,200

$1,001,200



Liabilities

Accrued Vacation Pay

$ –0–

($108,000)

Note Payable

(464,000)

(464,000)

Total Liabilities

($464,000)

($572,000)



Stockholder Equity

Paid in Capital

($ 4,000)

($ 4,000)

Retained Earnings

(229,200)

(425,200)

Total Liabilities and
Stockholders Equity


($697,200)


($1,001,200)


Amelia Inc.’s gross deferred tax assets and liabilities at the beginning of Amelia’s year are listed below.

Beginning of Year

Accrued Vacation Pay

$84,000

Subtotal

$84,000

Applicable Tax Rate

´ 34%

Gross Deferred Tax Asset

$28,560



Building – Acc. Depreciation

($244,000)

Furniture & fixtures – Acc. Depreciation

(12,800)

Subtotal

($256,800)

Applicable tax rate

´ 34%

Gross deferred tax liability

($ 87,312)


Amelia Inc.’s book income before tax is $25,200. Amelia records two permanent book-tax differences. It earned $1,000 in tax exempt municipal bond interest and $1,840 in nondeductible meals and entertainment expense. Determine Amelia’s change in net deferred tax asset or net deferred tax liability for the current year and provide the journal entry to record this amount.

1616. CHAPTER 14—TAXES ON THE FINANCIAL STATEMENTS Question PR #18
Amelia, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Assume a 34% corporate tax rate and no valuation allowance.


Tax Debit/(Credit)

Book Debit/(Credit)

Assets

Cash

$ 1,200

$ 1,200

Accounts Receivable

20,000

20,000

Buildings

1,200,000

1,200,000

Acc. Depreciation

(600,000)

(320,000)

Furniture & Fixtures

160,000

160,000

Acc. Depreciation

(84,000)

(60,000)

Total Assets

$ 697,200

$1,001,200



Liabilities

Accrued Vacation Pay

$ –0–

($108,000)

Note Payable

(464,000)

(464,000)

Total Liabilities

($464,000)

($572,000)



Stockholder Equity

Paid in Capital

($ 4,000)

($ 4,000)

Retained Earnings

(229,200)

(425,200)

Total Liabilities and
Stockholders Equity


($697,200)


($1,001,200)


Amelia Inc.’s gross deferred tax assets and liabilities at the beginning of Amelia’s year are listed below.

Beginning of Year

Accrued Vacation Pay

$84,000

Subtotal

$84,000

Applicable Tax Rate

´ 34%

Gross Deferred Tax Asset

$28,560



Building – Acc. Depreciation

($244,000)

Furniture & fixtures – Acc. Depreciation

(12,800)

Subtotal

($256,800)

Applicable tax rate

´ 34%

Gross deferred tax liability

($ 87,312)


Amelia Inc.’s book income before tax is $25,200. Amelia records two permanent book-tax differences. It earned $1,000 in tax exempt municipal bond interest and $1,840 in nondeductible meals and entertainment expense. Calculate Amelia’s current tax expense.



1617. CHAPTER 14—TAXES ON THE FINANCIAL STATEMENTS Question PR #19
Amelia, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Assume a 34% corporate tax rate and no valuation allowance.


Tax Debit/(Credit)

Book Debit/(Credit)

Assets

Cash

$ 1,200

$ 1,200

Accounts Receivable

20,000

20,000

Buildings

1,200,000

1,200,000

Acc. Depreciation

(600,000)

(320,000)

Furniture & Fixtures

160,000

160,000

Acc. Depreciation

(84,000)

(60,000)

Total Assets

$ 697,200

$1,001,200



Liabilities

Accrued Vacation Pay

$ –0–

($108,000)

Note Payable

(464,000)

(464,000)

Total Liabilities

($464,000)

($572,000)



Stockholder Equity

Paid in Capital

($ 4,000)

($ 4,000)

Retained Earnings

(229,200)

(425,200)

Total Liabilities and
Stockholders Equity


($697,200)


($1,001,200)


Amelia Inc.’s gross deferred tax assets and liabilities at the beginning of Amelia’s year are listed below.

Beginning of Year

Accrued Vacation Pay

$84,000

Subtotal

$84,000

Applicable Tax Rate

´ 34%

Gross Deferred Tax Asset

$28,560



Building – Acc. Depreciation

($244,000)

Furniture & fixtures – Acc. Depreciation

(12,800)

Subtotal

($256,800)

Applicable tax rate

´ 34%

Gross deferred tax liability

($ 87,312)


Amelia Inc.’s book income before tax is $25,200. Amelia records two permanent book-tax differences. It earned $1,000 in tax exempt municipal bond interest and $1,840 in nondeductible meals and entertainment expense. Provide the journal entry to record Amelia’s current tax expense.

1618. CHAPTER 14—TAXES ON THE FINANCIAL STATEMENTS Question PR #20
Amelia, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Assume a 34% corporate tax rate and no valuation allowance.


Tax Debit/(Credit)

Book Debit/(Credit)

Assets

Cash

$ 1,200

$ 1,200

Accounts Receivable

20,000

20,000

Buildings

1,200,000

1,200,000

Acc. Depreciation

(600,000)

(320,000)

Furniture & Fixtures

160,000

160,000

Acc. Depreciation

(84,000)

(60,000)

Total Assets

$ 697,200

$1,001,200



Liabilities

Accrued Vacation Pay

$ –0–

($108,000)

Note Payable

(464,000)

(464,000)

Total Liabilities

($464,000)

($572,000)



Stockholder Equity

Paid in Capital

($ 4,000)

($ 4,000)

Retained Earnings

(229,200)

(425,200)

Total Liabilities and
Stockholders Equity


($697,200)


($1,001,200)


Amelia Inc.’s gross deferred tax assets and liabilities at the beginning of Amelia’s year are listed below.

Beginning of Year

Accrued Vacation Pay

$84,000

Subtotal

$84,000

Applicable Tax Rate

´ 34%

Gross Deferred Tax Asset

$28,560



Building – Acc. Depreciation

($244,000)

Furniture & fixtures – Acc. Depreciation

(12,800)

Subtotal

($256,800)

Applicable tax rate

´ 34%

Gross deferred tax liability

($ 87,312)


Amelia Inc.’s book income before tax is $25,200. Amelia records two permanent book-tax differences. It earned $1,000 in tax exempt municipal bond interest and $1,840 in nondeductible meals and entertainment expense. What is Amelia’s total provision for income tax expense reported on its financial statement and its book net income after tax?



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