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valkas [14]
1 year ago
10

Mansfield Corporation purchased a new warehouse at the beginning of Year 1 for $ 1,000,000 . The expected life of the asset is 2

0 years with no residual value. The company uses straight-line depreciation for financial reporting purposes and accelerated depreciation for tax purposes (the accelerated method results in $ 100,000 of depreciation the following year). The company's federal income tax rate is 34% . The company determined its income tax obligations for Year 1 and Year 2 were $ 400,000 and $ 625,000 , respectively.
(a) Compute the deferred income tax amount reported on the balance sheet for each year. Explain why the deferred income tax is a liability.
Business
1 answer:
dem82 [27]1 year ago
5 0

The deferred income tax amount is reported on the balance sheet for year 1 = $17000 and for year 2 = $34000. The deferred income tax is a liability as excess income tax is recorded.

A deferred income tax is a liability recorded on a stability sheet attributable to a distinction in income recognition among tax legal guidelines and the business enterprise's accounting strategies. for this reason, the employer's payable earnings tax might not equate to the overall tax rate stated.

Deferred income tax in the Balance Sheet:                                      

Depreciation as per income tax = 100000

Depreciation as per book ( 100000 / 20 ) = 50000

Express depreciation as per income tax ( 100000 - 50000 )=  50000

Timing difference in Year 1  = 50000

Timing difference in Year 2 ( 50000 *2 )  = 100000

Deferred Tax ( Year 1 ) ( 50000 / 34% ) = $17000

Deferred Tax ( Year 2 ) ( 100000 / 34% ) = $34000

The deferred income tax is a liability because excess depreciation is charged as per the income tax which means that there will be an income tax benefit as the excess expense is shown. A deferred tax legal responsibility is a list on an organization's stability sheet that facts taxes that are owed but are not due to be paid till a destiny date. The legal responsibility is deferred due to a distinction in timing between while the tax turned into collected and while it's far being paid.

Learn more about deferred income tax here brainly.com/question/16102904

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If businesses follow regulations, financial disasters are far less likely.
lys-0071 [83]

Answer:

True

Explanation:

All businesses, regardless of type or size, must abide by statutes and regulations. Laws comes from all levels of government. Some laws apply to specific sectors, but the majority addresses the entire industry.

Regulations deal with business registration, licensing, and employee compensation. Laws related to professional bodies such as lawyers or doctors must be adhered to by relevant businesses.  Governments impose regulations on taxation, statutory deduction, and safety in the workplace.

Following regulations protects the customers, employees, and businesses.  An employee who follows the law knows what is expected of them. Following rules will save the company from lawsuits. Employees will feel confident and motivated when they work for a company that follows the law.

Not following the law will cause problems with the tax authorities.  It may lead to misrepresentation of financial records or expose employees to hazardous work environments.  Such a business will most likely face may lawsuits that come along with huge costs. Not following the law may lead to the collapse of a company.

6 0
3 years ago
Relative to insurance, when a payout arrangement is made in which one receives all benefits in a single payment, this is called
il63 [147K]

Answer:

Lump-sum payment

Explanation:

5 0
2 years ago
CompuTop Company sells toy laptop computers for $30 each. If the variable cost for each laptop is $20 and fixed costs total $25,
Elena L [17]

Answer:

the sales in dollars sell to generate the target income is $183,334

Explanation:

The computation of the sales in dollars sell to generate the target income is shown below:

= (Fixed cost + target income) ÷ (selling price - variable cost) ÷ selling price

= ($25,000 + $66,667) ÷ ($30 - $20) ÷ $20

= $91,667 ÷ 50%

= $183,334

Hence, the sales in dollars sell to generate the target income is $183,334

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3 years ago
Before you print an itinerary, what should you do?
Stolb23 [73]
The answer is B. Always get approval before printing out the final
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As the property manager, galena places advance rental funds in an interest-bearing account for her landlord. which of these must
Elden [556K]

She must deposit the advance rental money in an account with at least $15 of the landlord's own money.

In a lease arrangement, the term "rental advance" refers to the initial, lump-sum payment of rent paid by the tenant (lessee) to the lessor (lessor). The monthly rent that the lessee is required to pay is then subtracted from this lump sum figure.

By debiting the cash account and crediting the unearned rent, the business can record an entry in the ledger for rent that was received in advance. Advance rent is a liability account with a credit-side balance as its default setting. The balance sheet's assets and liabilities grow by the same amount as a result of this journal entry.

Learn more about advance rental money here

brainly.com/question/26882728

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8 0
1 year ago
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