Four independent situations are described below. Each involves future deductible amounts and/or future taxable amounts producedby temporary differences reported first on:(1)(2)(3)(4)Income StatementRevenue$ 22,500$ 15,500$ 15,500Accounting incomeTemporary differences:Income statement firstExpenseRevenueExpenseTax return first:RevenueExpenseTaxable income$ 22,500$ 22,500$Required:For each situation, determine the taxable income assuming pretax accounting income is $100,000.Note: Amounts to be deducted should be indicated by a minus sign.(1)Revenue$ 22,500Tax Return.0 $(2)Expense0 $$ 10,500(3)0 $0

Temporary differences occur when the treatment of an income statement line item is the same for both…

our independent situations are described below. Each involves future deductible amounts and/or future taxable amounts pa y temporary differences reported first on: (1) (2) (3) (4) Income Statement Revenue $ 22,500 $ 15,500 $ 15,500 Accounting income Temporary differences: Income statement first Expense Revenue Expense $ 22,500 $ 22,500 Tax Return Revenue $ 22,500 Required: For each situation, determine the taxable income assuming pretax accounting income is $100,000. Note: Amounts to be deducted should be indicated by a minus sign. (2) Expense $ 10,500 (3) (4)

our independent situations are described below. Each involves future deductible amounts and/or future taxable amounts pa y temporary differences reported first on: (1) (2) (3) (4) Income Statement Revenue $ 22,500 $ 15,500 $ 15,500 Accounting income Temporary differences: Income statement first Expense Revenue Expense $ 22,500 $ 22,500 Tax Return Revenue $ 22,500 Required: For each situation, determine the taxable income assuming pretax accounting income is $100,000. Note: Amounts to be deducted should be indicated by a minus sign. (2) Expense $ 10,500 (3) (4)

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter9: Operating Activities

Section: Chapter Questions

Problem 2FIC

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Eight independent situations are described below. Each involves future deductible amounts and/or future taxable amounts ($ in millions). Temporary Differences Reported First on: The Income Statement The Tax Return Revenue Expense Revenue Expense 1. $20 2. $20 3. $20 4. $20 5. 15 20 6. 20 15 7. 15 20 10 8. 15 20 5 10 Required: For each situation, determine taxable income, assuming pretax accounting income is $100 million.
Eight Independent situations are described below. Each involves future deductible amounts and/or future taxable amounts: 1. 2. 3. 5. 6. 7. 2 The Income Statement Revenue 3 4 5 6 7 8 ($ in millions) Temporary Differences Reported First on: The Tax Return $24 19 19 19 Expense $24 Situations Taxable Income 1 24 24 24 24 Revenue $24 19 9 Expense Required: For each situation, determine taxable income, assuming pretax accounting income is $140 million. (Enter your answers in millions (I.e., 10,000,000 should be entered as 10).) $24 14 14
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Listed below are several terms and phrases associated with income statement presentation and the statement ofcash flows. Pair each item from List A (by letter) with the item from List B that is most appropriately associatedwith it.List A List B_____ 1. Intraperiod tax allocation_____ 2. Comprehensive income_____ 3. Unrealized holding gain oninvestments_____ 4. Operating income_____ 5. A discontinued operation_____ 6. Earnings per share_____ 7. Prior period adjustment_____ 8. Financing activities_____ 9. Operating activities (SCF)_____ 10. Investing activities_____ 11. Direct method_____ 12. Indirect methoda. An other comprehensive income itemb. Starts with net income and works backwards to convert tocashc. Reports the cash effects of each operating activity directly onthe statementd. Correction of a material error of a prior periode. Related to the external financing of the companyf. Associates tax with income statement itemg. Total nonowner change in equityh. Related to the…
Save & Exit Subm Two independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences: SITUATION Taxable income Amounts at year-end: Future deductible amounts 2. $46,000 $86,000 5,600 10,600 0 5,600 Future taxable amounts Balances at beginning of year, dr (cr): Deferred tax asset, Deferred tax liability $ 1,000 $ 3,180 0 1,000 The enacted tax rate is 30% for both situations. Required: For each situation determine the: SITUATION 2. (a.) Income tax payable currently. (b.) Deferred tax asset - balance at year-end. (c.) Deferred tax asset change dr or (cr) for the year. (d.) Deferred tax liability - balance at year-end. (e.) Deferred tax liability change dr or (cr) for the year. (f.) Income tax expense for the year. Next > 31 of 39
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