1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Sholpan [36]
3 years ago
5

Star Corp. reported pretax net income from continuing operations of $1,000,000. Tax depreciation exceeded book depreciation by $

100,000. Star Corp. had $50,000 of accrued vacation pay that was not deductible. Star Corp. also claimed $150,000 dividends received deduction (DRD). Assume no valuation allowance.
Required:
a. Compute Star Corp.'s current income tax expense or benefit.
b. Compute Star Corp.'s deferred income tax expense or benefit.
c. Provide two reconciliation of Star Corp.'s total income tax provision with its hypothetical income tax expense of 21% in both dollars and rates.
Business
1 answer:
anastassius [24]3 years ago
5 0

Answer:

Star Corp

A.

Pretax net income from continuing operations = $1,000,000

Add Accrued Vacation $50,000

Deduct additional Tax Depreciation $100,000

Deduct Dividend received deductions $150,000

Net Taxable Income = $800,000

Income Tax expenses = 21% x $800,000 = $168,000

Income tax Expense provision based on book Net income = 21% x $1,000,000 = $210,000

Income tax benefit = $168,000 minus $210,000 = $42,000 (benefit)

B.

Deferred income tax expense =

Income tax Provision = $210,000

Less income tax expense = $168,000

Differed income tax (benefit) = $42,000

C.

Reconciliation

Book Net income = $1,000,000

Tax rate = 21%

Tax expense provision = $210,000...(a)

Pretax net income from continuing operations = $1,000,000

Add Accrued Vacation $50,000

Deduct additional Tax Depreciation $100,000

Deduct Dividend received deductions $150,000

Taxable Net income (adjusted) = $800,000

Tax rate = 21%

Tax expense provision = $168,000......(b)

Difference (a) minus (b) = $42,000 . This is a benefit to the firm (star corp) because its actual tax liability is less than what it provided for because of net deductibles not accounted for in its income statement.

You might be interested in
The economy continues to descend into chaos. The stock market still moves down after it makes progress forward, and unemployment
BaLLatris [955]

Answer:

A) . It is going to be a while before things get better in the United States.

Explanation:

3 0
3 years ago
Read 2 more answers
_____ involves a strategic effort by firms to supply customers with environmentally friendly, sustainable merchandise and servic
masha68 [24]
Sustainability involves a strategic effort by firms to supply customers with environmentally friendly, sustainable merchandise and services. greenwashing eco-marketing greener advertising eco-selling green marketing.

Therefore I think the answer is Sustainability
Hope it helps
8 0
3 years ago
​When Julius hears that there are going to be cutbacks in his department, he immediately calls his supervisor and asks for an ap
Darya [45]

Answer:

maladaptive coping

Explanation:

7 0
3 years ago
On August 8th the​ three-month risk-free rate of interest in the United States was 3.75 percent and it was 3.00 percent in Japan
weeeeeb [17]

Answer:

The answer is 0.01082

Explanation:

The formula for forward exchange rate is:

F = S x 1+rd/1+rf

where F is the forward exchange rate

S is the spot exchange rate(0.010798)

rd is the foreign currency interest rate(3% or 0.03)

rf is the domestic interest rate(3.75% or 0.0375

Month is 3 months(90days) and total number of days in a year is 360days.

Find find the attached file for calculation

6 0
3 years ago
Rose Co. sells one product and uses the last-in, first-out method to determine inventory cost. Information for the month of Janu
AleksandrR [38]

Answer:

C) $80,000

Explanation:

Since Rose uses the LIFO method for determining COGS, the 10,000 units sold should be recorded at $7.90 (purchase price 1/5).

10,000 units still remain in inventory (8,000 beginning + 2,000 last purchase). Using the LIFO costing method the inventory unit cost should be [(8,000 x $8.20) + (2,000 x $7.90)] / 10,000 = $8.14 per unit

If the replacement cost is $8 per unit, and Rose decides to use lower-of-cost-or-market rule, then she should use the lowest cost which is the replacement cost ($8 < $8.14).

So the ending inventory's total cost is $8 per unit x 10,000 units = $80,000

             

8 0
3 years ago
Other questions:
  • Money market mutual funds
    6·1 answer
  • Julia is preparing the balance sheet for her company. building and land are the only two assets classified as property, plant, a
    9·1 answer
  • You are the manager of a large​ crude-oil refinery. As part of the refining​ process, a certain heat exchanger​ (operated at hig
    7·1 answer
  • Prepare journal entries for each of the following
    7·1 answer
  • On September 1, 2020, Concord Corporation acquired Skysong Enterprises for a cash payment of $790,000. At the time of purchase,
    14·1 answer
  • The potential benefits lost by taking a specific action when two or more alternative choices are available is known as a(n):____
    9·2 answers
  • if the federal reserve decreases the reserve rate from 10% to 8%, how does this affect the amount of money that would result bec
    12·1 answer
  • The fixed costs of the division were $193,000. If the mountain bike division is dropped, 30% of the fixed costs allocated to tha
    5·1 answer
  • By wr
    10·1 answer
  • The accounts receivable aging report:
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!