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nlexa [21]
3 years ago
8

Typical Corp. reported a deferred tax liability of $6,000,000 for the year ended December 31, 2017, when the tax rate was 40%. T

he deferred tax liability was related to a temporary difference of $15,000,000 caused by an installment sale in 2017. The temporary difference is expected to reverse in 2019 when the income deferred from taxation will become taxable. There are no other temporary differences. Assume a new tax law passed in 2018 and the tax rate, which will remain at 40% through December 31, 2018, will become 48% for tax years beginning after December 31, 2018. Pretax accounting income and taxable income for the year 2018 is $30,000,000.
Required:
Prepare a compound journal entry to record Typical's income tax expense for the year 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Business
1 answer:
Alex_Xolod [135]3 years ago
6 0

Answer:

Income tax expense (Balancing figure) $13,200,000  

          To Deferred tax liability (8% × $15,000,000)  $1,200,000

          To Income tax payable ($30,000,000 × 40%)  $12,000,000

(Being the income tax expense is recorded)

Explanation:

The compound journal entry is shown below:

Income tax expense (Balancing figure) $13,200,000  

          To Deferred tax liability (8% × $15,000,000)  $1,200,000

          To Income tax payable ($30,000,000 × 40%)  $12,000,000

(Being the income tax expense is recorded)

For recording this, we debited the income tax expense as it increased the expenses and at the same time it also increased the liabilities i.e deferred tax liability and income tax payable so it would be credited

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7nadin3 [17]

Outstanding shares will be 12,000 shares.

These are calculated as follows:

Here the number of shares are as follows;

Authorized shares are 20,000, Issued shares are 15,000, Treasury shares are 3,000

Therefore, the number of outstanding shares can be calculated as follows

Number of outstanding shares = Issued stock- Treasury stock

= 15,000-3,000

= 12,000

Hence the number of outstanding shares is 12,000

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1 year ago
What is the SNAP food program governed by the farm bill
nevsk [136]

Answer:

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Explanation:

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2 years ago
During the gdl program, the dps can suspend or revoke your license for __________ or more moving violations in twelve months.
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3 years ago
Alicia is interested in purchasing a set of ear buds to use with her laptop and smartphone. She visits best buy and notices that
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She decides to purchase the beats brand because she believes it’s a higher quality set. In this case, alicia has been influenced by the Informative effect of price.

<h3>Information effect of price.</h3>

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Here, Alicia buying the beats brand even thogh it costs higher than the skullcandy model  shows that she is using the information effect of price making her to perceive the beats brand as having higher quality.

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2 years ago
At Ruth Company, events and transactions during 2020 included the following. The tax rate for all items is 20%. (1) Depreciation
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Answer:

D. ($100,000)

Explanation:

Calculation for what The effect of these events and transactions on 2020 income from continuing operations net of tax would be

Continuing operations net of tax=(20%*$125,000)-$125,000

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Therefore The effect of these events and transactions on 2020 income from continuing operations net of tax would be ($100,000)

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