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Vinil7 [7]
3 years ago
11

Ivanhoe Inc., in its first year of operations, has the following differences between the book basis and tax basis of its assets

and liabilities at the end of 2019.
Book Basis Tax Basis
Equipment (net) $431,000 $371,100
Estimated warranty liability $192,000$ -0-

It is estimated that the warranty liability will be settled in 2020. The difference in equipment (net) will result in taxable amounts of $19,100 in 2020, $30,600 in 2018, and $10,300 in 2019. The company has taxable income of $470,000 in 2018. As of the beginning of 2016, the enacted tax rate is 34% for 2018-2020, and 30% for 2019, Vaughn expects to report taxable income through 2019.

Required:
Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2018.
Business
1 answer:
Ostrovityanka [42]3 years ago
5 0

Answer:

Larkspur Inc.

Particulars                                     2018       2019      2019       Total  

Temporary difference giving    $30,600  $10,300  $19,100  

rise to future taxable amount

Enacted tax rate                            34%        30%        34%

Deferred tax liability                   $10,404  $3,090    $6,494   $19,988

Temporary diff. giving rise to    $192,000   $0           $0

future deductible amount

Deferred tax assets                    $65,280    $0           $0        $65,280

Journal Entries - Larkspur Inc.  

Income tax expense Dr $114,508

Deferred tax assets Dr $65,280

        To Income tax payable Cr. $159,800 ($470,000*34%)

        To Deferred tax liability Cr. $19,988

(To record income tax and deferred tax)

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Journalize the following transactions, using the allowance method of accounting for uncollectible receivables
Katyanochek1 [597]

Answer:

                                 Journal entry

Date Account & Explanation                     Debit      Credit

Mar 17.    Cash                                                 $2,700

               Allowance for doubtful accounts   $6370  

                        Account receivable                                $9,070

Jul 29     Account receivable                         $6,370

                        Allowance for doubtful accounts           $6,370

              (To record amount reinstated)

               Cash                                                 $6,370

                         Account receivable                                 $6,370

              (To record amount received)

3 0
2 years ago
An audit basically consists of having the auditor form an opinion regarding management's financial statement assertions. The aud
Anika [276]

Answer:

C. Tracing sales invoices to shipping documents to test the occurrence of reported sales.

5 0
3 years ago
Xyz company makes one product and has calculated the following amounts for direct labor: ah x ar = $84,000; ah x sr = $83,000; s
labwork [276]

Answer:

1,000 Unfavorable

Explanation:

AH x AR = $84,000;

AH x SR = $83,000;

SH x SR = $85,000.

Compute the labor rate variance

then,

($84,000 - $83,000) = 1,000 Unfavorable

To learn more about labor cost variance, refer

to brainly.com/question/24553900

#SPJ4

8 0
2 years ago
Buffalo Corporation reported net income of $415,720 in 2020 and had 208,000 shares of common stock outstanding throughout the ye
LuckyWell [14K]

Answer:

Buffalo Corporation

Diluted earnings per share is:

$1.67 per share.

Explanation:

a) Data and Calculations:

Reported net income = $415,720

Common Stock outstanding = 208,000 shares

Options outstanding = 40,500 shares

Total outstanding shares = 248,500 shares (208,000 + 40,500)

Option price per share = $11

Market price per share = $15

Earnings per share = Net Income/Common Stock outstanding

Computation of diluted earnings per share:

Diluted Earnings per share = Net Income/Total outstanding shares

= $415,720/248,500

= $1.67

b) Buffalo's diluted earnings per share uses the total outstanding shares (common stock plus options stock plus all convertible securities) to divide into the net income.  As the description implies, all convertible stocks are included in the calculation to arrive at the earnings per share.

4 0
3 years ago
g announced that it plans to cut its dividend from $2.50 to $1.50 per share (next year) and use the extra funds to expand its op
mote1985 [20]

Answer:

The value of the Share of Zeke after the new Expansion is $25.

Explanation:

As there was no growth in the dividend before change, Price of the share from a stable dividend payment can be calculated by following formula.

Price  = Dividend / Required rate of return

As we have the share price and the dividend amount we need to calculate the required rate of return.

Required rate of return = Dividend / Price

Placing value in the formula

Required rate of return = $2.50 / $25.00 = 0.1 = 10%

After New Expansion

Dividend = $1.50

Growth rate = 4%

The share price can be calculated by the dividend growth formula, as follow

Price of share = Dividend / (Rate of return - growth rate)

Price of share = $1.50 / (10% - 4%)

Price of share = $1.50 / 6%

Price of share = $25

7 0
3 years ago
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