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riadik2000 [5.3K]
3 years ago
14

At the end of the prior year, Doubtful Inc. had a deferred tax asset of $18,500,000 attributable to its only timing difference,

a temporary difference of $47,000,000 in a liability for estimated expenses. At that time, a valuation allowance of $3,730,000 was established. At the end of the current year, the temporary difference is $42,000,000, and Doubtful determines that the balance in the valuation account should now be $5,000,000. Taxable income is $14,700,000 and the tax rate is 35% for all years.
Required:
Prepare journal entries to record Doubtful's income tax expense for the current year.
Business
1 answer:
iren [92.7K]3 years ago
7 0

Answer:

Journal entries to record Doubtful's income tax expense for the current year.

No   Account titles and Explanation             Debit'$    Credit'$

1       Income tax expense                             8,945,000

                  Deferred tax asset                                     3,800,000

                  [(42,000,000*35%) - 18,500,000]

                   Income taxes payable                               5,145,000

                   [(14,700,000*35%)]

         (To record tax expenses)

2        Income tax expense                            1,270,000

                 Valuation allowance - deferred tax asset  1,270,000

                   (3,730,000 - 5,000,000

          (To record valuation allowance)

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A company is to hire two new employees. They have prepared a final list of thirteen candidates, all of whom are equally qualifie
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Answer: 0.1282

Explanation:

Total number of possible outcome( total candidates) = 13

Total number of men = 13 - 8 = 5

Total number of women = 8

Number of candidates to be selected = 2

Find the probability that both are men :

Probability of 1st candidate being a male = required outcome ÷ total possible outcome = 5/13

Probability of second candidate being a male, means we now have 4 men left and a total of 12 = 4/12

Therefore, P = (5/13) × (4/12)

P = (5/13) ×(1/3) = 5/39 = 0.1282

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2 years ago
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Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase variable costs for all spri
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Answer:

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Explanation:

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Income Statements                          Normal    Mass Production

Sales revenue                              $12,121,200   $13,439,140

Variable manufacturing costs       $5,811,160     $6,181,530

Variable selling and admin. costs 2,673,680      2,941,048

Total variable costs                     $8,484,840    $9,122,578

Contribution margin                   $3,636,360    $4,316,562

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Selling and administrative costs     798,370         798,370

Total fixed costs                        $2,954,030   $2,954,030

Net operating income                  $682,330    $1,362,532

Increase in net operating income = $680,202 ($1,362,532 - $682,330)

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