Assume Ralph Enterprises reported $200,000 each year for financial reporting purposes in 2014, 2015, and 2016. For tax purposes, the company reported $400,000 of revenue in 2014, $100,000 in 2015, and $100,000 in 2016. The only expense, other than income taxes, which Ralph pays in cash, is his salary of $50,000 in each of the three years. His $50,000 salary is a deductible expense for both financial reporting and tax purposes. The tax rate is 30 percent.
Required:
a. How much income tax did Ralph pay for the year ending December 31, 2015? _____________
b. What was the income tax expense on Ralph Enterprises income statement for the year ending December 31, 2015? _________________
c. What was is the amount of the deferred tax asset or deferred tax liability shown on Ralph Enterprises balance sheet on December 31, 2015? __________________________
d. Was the amount in c. above (circle one) (a) deferred tax asset or (b) deferred tax liability?
Assume Ralph Enterprises reported $200,000 each year for financial reporting purposes in 2014, 2015, and 2016. For tax purposes, the company reported $400,000 of revenue in 2014, $100,000 in 2015, and $100,000 in 2016. The only expense, other than income taxes, which Ralph pays in cash, is his salary of $50,000 in each of the three years. His $50,000 salary is a deductible expense for both financial reporting and tax purposes. The tax rate is 30 percent.
Required:
a. How much income tax did Ralph pay for the year ending December 31, 2015? _____________
b. What was the income tax expense on Ralph Enterprises income statement for the year ending December 31, 2015? _________________
c. What was is the amount of the deferred tax asset or deferred tax liability shown on Ralph Enterprises balance sheet on December 31, 2015? __________________________
d. Was the amount in c. above (circle one) (a) deferred tax asset or (b) deferred tax liability?
Related questions
Income Taxes
Thun Company has been in operation for several years. It has both a deductible and a taxable temporary difference. At the beginning of 2016, its deferred tax asset was $690, and its deferred tax liability was $750. The company expects its future deductible amount to be âdeductibleâ in 2017 and its future taxable amount to be "taxable" in 2018. In 2015, Congress enacted income tax rates for future years as follows: 2016, 30%; 2017, 34%; and 2018, 35%. At the end of 2016, Thun reported income taxes payable of $25,800, an increase in its deferred tax liability of $300, and an ending balance in its deferred tax asset of $860. Thun has prepared the following schedule of items related to its income taxes for 2016.
Required:
Fill in the blanks in the following schedule.
| Item | Amount |
|---|---|
| Taxable income for 2016 | $ |
| Future taxable amount, 12/31/16 | $ |
| Increase in future deductible amount during 2016 | $ |
| Income tax expense for 2016 | $ |
Miller Company has a defined benefit pension plan. The following information is available at year end:
Projected benefit obligation $1,345,000
Accumulated benefit obligation $1,085,000
Vested benefit obligation $ 995,000
Fair value of plan assets $1,030,000
Which of the following would Miller report on its year-end balance sheet?
| A long term asset of $35,000 |
| A long term liability of $55,000 |
| A long term liability of $315,000 |
| A long term liability of $1,345,000 Maxie Corp. purchases equipment for $400,000 on 1/1/16. The equipment is expected to have an eight-year life with a residual value of $40,000 for both financial reporting and tax Maxie uses straight line depreciation for financial reporting and double declining balance for tax purposes. Maxie reported Income before depreciation of $500,000 for both 2016 & 2017. For those tax years, Miser reported the following depreciation deductions: Tax (DDB) Financial (SL) 2016 $100,000 $ 45,000 2017 $ 75,000 $ 45,000 If Maxie Corp has an income tax rate of 40%, which of the following would appear on Maxieâs 12/31/2017 Balance Sheet?
|
Zekany Corporation would have had identical income beforetaxes on both its income tax returns and income statements for theyears 2013 through 2016 except for differences in depreciation onan operational asset. The asset cost $250,000 and is depreciatedfor income tax purposes in the following amounts: |
| 2013 | $ | 82,500 | |
| 2014 | 110,000 | ||
| 2015 | 37,500 | ||
| 2016 | 20,000 | ||
The operational asset has afour-year life and no residual value. The straight-line method isused for financial reporting purposes. |
Income amounts beforedepreciation expense and income taxes for each of the four yearswere as follows. |
| 2013 | 2014 | 2015 | 2016 | |||||||||
| Accountingincome before taxes and depreciation | $ | 135,000 | $ | 155,000 | $ | 145,000 | $ | 145,000 | ||||
Assume the average and marginal income tax rate for 2013and 2014 was 30%; however, during 2014 tax legislation was passedto raise the tax rate to 40% beginning in 2015. The 40% rateremained in effect through the years 2015 and 2016. Both theaccounting and income tax periods end December 31. |
| Required: |
Prepare the journal entries to record income taxes for theyears 2013 through 2016. (If no entry is required for aparticular transaction, select "No journal entry required" in thefirst account field.) |
