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Sedaia [141]
2 years ago
8

Splish Inc. had pretax financial income of $139,400 in 2020. Included in the computation of that amount is insurance expense of

$4,400 which is not deductible for tax purposes. In addition, depreciation for tax purposes exceeds accounting depreciation by $10,000.
Prepare Shetland�s journal entry to record 2020 taxes, assuming a tax rate of 30%.
Business
1 answer:
RoseWind [281]2 years ago
6 0

Answer:

The Journal entry and their narrations is shown below:

Explanation:

The Journal entry is shown below:-

Income tax expenses Dr,         $43,140

        To income tax payable                    $40,140

         To Deferred tax liability                  $3,000

(Being Income tax expenses for the year is recorded)

Working Note 1:-

Income as per tax purpose

Pretax financial income                   $139,400

Add: permanent difference

Disallowed insurance expenses     $4,400

Less: Timing difference

Excess depreciation allowed            $10,000

Income as per tax purpose                 $133,800

Working Note 2

Income tax payable

= Income tax rate × Income as per tax purposes

= 30% × $133,800

= $40,140

Working Note 3

Deferred tax liability = Timing difference × Tax rate

= $10,000 × 30%

= $3,000

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All of the following are considered examples of disreputable conduct for which a CPA can be disbarred or suspended except Direct
ivann1987 [24]

Answer:

Failure to timely pay personal income taxes.

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Rules of Conduct

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6 0
2 years ago
the graph to the right depicts the per unit cost curves and demand curve facing a shirt manufacturer in a competitive industry 2
natulia [17]

The firm will exit or leave the industry as its not making any profits.

<h3><u>CALCULATION OF THE PROFITS</u></h3>

According to the Question,

The firm produces at P = MC

Where we know,

Q = 55 units

P = $4.78

ATC or Average Total Cost = 6.76

AVC or Average Valuable Cost = 3

P > AVC so the firm produces to minimize losses at the MC = P.

Profit = ( P - ATC ) × Q

=( 4.78 - 6.76 ) × 55

= - 108.9

The profit is - 108.9 dollars per minute.

As the firm in the industry is making losses ( a negative profit ) so it  will exit the industry in the long run.

To know more about competitive firms, check the given link.

brainly.com/question/28104159

#SPJ4

8 0
2 years ago
Ace Industries has a current assets equal to $3 illion . the company's current ratio is 1.5. and its quick ratio is 1.0.
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Answer:

$2,000,000

$1,000,000

Explanation:

We know that

Current ratio = Total Current assets ÷ total current liabilities  

1.5 = $3,000,000 ÷ total current liabilities  

So, the total current liabilities would be

= $2,000,000

And

Quick ratio = Quick assets ÷ total current liabilities  

1.0 = Quick assets ÷ $2,000,000

Quick assets = $2,000,000

So, the inventory would be

= Total current assets - quick assets

= $3,000,000 - $2,000,000

= $1,000,0000

6 0
3 years ago
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