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Oksanka [162]
3 years ago
7

At the end of the year, the deferred tax asset account had a balance of $4 million attributable to a temporary difference of $16

million in a liability for estimated expenses. Taxable income is $44 million. No temporary differences existed at the beginning of the year, and the tax rate is 25%. Prepare the journal entry(s) to record income taxes, assuming it is more likely than not that three-fourths of the deferred tax asset will not ultimately be realized.
Business
1 answer:
Alex3 years ago
5 0

Answer:

1 . Dr ncome tax expense 7

Dr Deferred tax asset 4

Cr Income tax payable 11

2. Dr Income tax expense3

Cr Valuation allowance-Deferred tax asset3

Explanation:

Preparation of Journal entries

JournalDebitCredit

(In million)

1 . Dr ncome tax expense 7

($11-$4=7)

Dr Deferred tax asset 4

($16× 25% = $4)

Cr Income tax payable 11

($44 × 25% = $11 )

2. Dr Income tax expense3

Cr Valuation allowance-Deferred tax asset3

(3/4 × $4) = $3 million

Deferred tax asset= ($16× 25%)

Deferred tax asset= $4 million

Income tax payable= ($44 × 25%)

Income tax payable= $11 million

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Suppose Piranha.com sells 3,500 books on account for $17 each (cost of these books is $35,700) on October 10, 2018 to The Textbo
nadezda [96]

Answer:

The journal entries are as follows:

(1) (i) On October 10, 2018

Merchandise inventory A/c (3,500 × $17) Dr. $59,500

        To Accounts payable (Piranha)                             $59,500

(To record the purchase of books)

(ii) On October 13, 2018

Accounts payable A/c (100 × $17) Dr. $1,700

        To merchandise inventory                     $1,700

(To record the purchase return of book)

(2) (i) On October 10, 2018

Accounts receivable A/c Dr. $59,500

         To sales

(To record the sales of book)

Cost of goods sold A/c Dr. $35,700

            To merchandise inventory    $35,700

(To record the cost of goods sold of book)

(ii) On October 13, 2018

Sales return and allowances A/c Dr. $1,700

              To accounts receivable                  $1,700

(To record the sales return of book)

Merchandise inventory A/c Dr. $1,020

           To cost of goods sold               $1,020

(To record the cost of good return)

5 0
3 years ago
A report indicated that the average real wage in manufacturing declined by 2 percent between 1990 and 2000. If the CPI equaled 1
inn [45]

Answer:

W = $27.34

Explanation:

Given data:

Percentage Decline in average income is = 2%

CPI in 1990 1.30

CPI in 2000 is 1.69

Average nominal wage is 2000 is $35

Inflation rate is given as

Inflation rate = % Change in CPI

                    = (1.69 / 1.3) - 1

                    = 1.3 - 1 = 0.3 = 30%

Real wage = Nominal wage / Price level,  hence

Percentage change in real wage = % Change in (nominal wage - inflation rate)

-2% = % Change in nominal wage - 30%

% Change in nominal wage = 28%

let nominal wage in 1990 is w

W\times 1.28% = $35

solving for W = $27.34

8 0
3 years ago
For each of the following independent cases, use FIFO costing to determine the information requested. Required: a. In the beginn
Ludmilka [50]

Answer:

$35,000

Explanation:

Units started and completed means that out of the units completed and transferred, how many were started during the period. This figure is calculated in physical terms only. So there is no need to express any units in their equivalents.

So, this gives us an idea of how to calculate this :

Units started and completed = Units Completed and Transferred - Units in Beginning Work in Process

therefore,

Units started and completed = 40,000 units - 5,000 units = $35,000

3 0
2 years ago
The following information relates to Sheridan Company for the year 2022.
aliina [53]

Answer:

a. Computation of net income

Particulars                                      Amount

Service revenue                            $52,500

Less: Expenses

Salaries and wages expenses      ($23,520)

Utilities expense                             ($2,600)

Rent expense                                  ($8,740)

Advertising expense                      <u> ($1,510)</u>

Net Income                                      <u>$16,130</u>

<u />

b. Computation of comprehensive income statement

Particulars                                            Amount

Net Income                                           $16,130

Add: Other Comprehensive Income  <u> $380    </u>

Comprehensive Income                      <u>$16,470</u>

Note: Dividend will not be included as it forms part of Income statement

5 0
3 years ago
If d0 = $1.75, g (which is constant) = 3.6%, and p0 = $40.00, what is the stock's expected total return for the coming year?
Orlov [11]

Answer:

The answer is <u>"a. 8.13%".</u>

Explanation:

Given that;

d0 = $1.75

p0 = $40.00

g = 3.6% = 0.036

By using the formula;

Price of the stock = (Dividend this year)(1+g) ÷ (r - g)  

By putting the values;

40 = (1.75)(1+0.036) ÷ (r - 0.036)

r - 0.036 = (1.75)(1.036) ÷ 40

r - 0.036 = 1.813 ÷ 40

r - 0.036 = 0.045325

r = 0.045325 + 0.036

r = 0.081325 = 0.081325 x 100

<u>r = 8.13%</u>

4 0
3 years ago
Read 2 more answers
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