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Advocard [28]
3 years ago
15

Freeman, Inc., reported net income of $40,000 for 20A. The income tax return excluded a revenue item of $3,000 (reported on the

income statement) because under the tax laws the $3,000 would not be reported for tax purposes until 20B. Assuming a 30% income tax rate, this situation would cause a 20A deferred tax amount of A) $3,000 (debit). B) $3,000 (credit). C) $ 900 (debit). D) $ 900 (credit).
Business
1 answer:
DaniilM [7]3 years ago
3 0

Answer:

The correct option is D,$900(credit)

Explanation:

The revenue omitted would be increase revenue in the year 20B ,as result net income would also be increased,hence the tax impact of it in the future that should be taken record of now is a deferred tax liability,a tax payable in the year 20B.

The amount of tax deferred is the omitted revenue multiplied by the tax rate of 30% i.e

deferred tax =$3000*30%=$900

This would be credited to deferred tax liability and debited income tax expense.

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4 0
3 years ago
Read 2 more answers
Emerald Corporation, a calendar year C corporation, was formed and began operations on April 1, 2018. The following expenses wer
Lorico [155]

Answer:

Emerald’s deduction for organizational expenditures is = $4550

Explanation:

given data

Expenses of temporary director and organizational meeting is = $27,000

Fee paid to state of incorporation = 1,000

Accounting services incident = 15,500

Legal services = 9,500

Expenses incident printing and sale = 6,000

to find out

Emerald deduction for organizational expenditures

solution

first we get here total Qualifying organizational expenditures that is

total Qualifying organizational expenditures  = $27,000 + $1,000 + $15,500 + $9,500

total Qualifying organizational expenditures  = $53000

and Immediate expensing will be as

Immediate expensing = $5000 - ($53000 - $50000)

Immediate expensing = $2000

so now we get here Emerald Corporation deduction under §248 for 2018 is

Amortization = \frac{$53000-$2000}{180} × 9  

here tax in year = 9 month

Amortization = $2550

Emerald’s deduction for organizational expenditures is = $2550 + $2000

Emerald’s deduction for organizational expenditures is = $4550

3 0
3 years ago
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